Having your own home is the dream of thousands of families in Colombia, but this year several factors have come together that are making it much more difficult to make it happen. As with other sectors, the housing sector is being affected by inflation, an expensive dollar, high interest rates and a panorama of economic slowdown

(See: Rents and transportation will keep inflation high.)

While inflation reached a maximum of 13.34% per year and the dollar is still above 4,500 pesos, rates for mortgage loans reached 16.6% in February, when a year ago they were at 11.6%.

The effects of these factors are being reflected in the purchase withdrawals, decrease in credit disbursements mortgage and housing leasing operations and, of course, in fewer homes sold.

The months in which sales records were reported, as occurred in the first half of 2022, are already history. While in February of last year more than 25,800 units were sold, by July only 18,800 were already sold and the year closed with over 13,200 homes.

But the fall is more noticeable in February 2023, a month in which only 9,920 homes were sold —adding Social Interest Housing (VIS) and non-VIS—, 61.6% less if compared to the amount of a year ago.

(See: Inflation: what is a safe haven asset and how it helps to invest in housing).

Only the VIS added 6,655 units, a 64% collapse. This figure is similar to that developed in the three most complicated months of the covid-19 pandemic: March, April and May 2020.

In addition, the president of the Colombian Chamber of Construction (Camacol), Guillermo Herrera, highlights that the time to sell social housing has doubled in the country, since in April 2022 it was five months and last February it had already risen. to more than 10 months, the highest since 2012.

likewise The inventory of unsold finished homes has been increasing. In the second month of this year, this indicator stood at 1.7 percent, a figure not seen for 10 years.

Another issue that has affected the housing sector has been the increase in construction costs. According to data from the National Administrative Department of Statistics (Dane), in February they had warned of 14.18 percent per year. The highest increases were registered in Montería (14.80 percent), Manizales (14.67 percent) and the Aburrá Valley (14.66 percent).

(See: Aid for Latinos looking for their own home in the United States).

“These are movements that clearly concern us and that create a challenge to the productivity of the sector and that can also generate problems for the financial closure of housing projects that are being considered for the future.”, stated Guillermo Herrera.

For his part, the president of the Oikos Business Group, Luis Aurelio Díaz, considers that the prices of some inputs could be normalizing towards June, which suggests that there will be a very promising second semester for the development of construction.

but also believes that it is necessary that the Executive provide the conditions for construction companies to continue promoting the development of housing solutions that families demand.

In addition, he expects inflation to be controlled by the middle of the year, which would lead to the Bank of the Republic reduce your interest rates to give the economy more dynamism.

“The economic environment for 2023 will not be easy, because it will continue to be impacted by inflation and interest rates; However, a scenario is looming that invites optimism, precisely because of this need to purchase a home in some sectors, especially low and medium”, highlighted.

This difficult scenario will cause the Gross Domestic Product (GDP) of buildings to grow only 9.8% in 2023, according to Camacol estimates, a lower figure than the 11.8% last year.

For the president of Camacol, the suspension of the Program My House Now since October of last year it has also hit home sales in Colombia, since this fall has been accelerating since this month.

However, we could see a recovery in the figures now that the Ministry of Housing is finally going to reactivate this program, which had more than 40,000 families in suspense who had not been able to sign the deeds of his house for the non-disbursement of this subsidy.

(See: Is it true that a free month of rent should be granted?).

With the issuance of Decree 490 of 2023, the adjustments made by the Government to Mi Casa Ya have become firm and starting tomorrow, families can check their status and the steps to follow on the ministry’s website to start or continue their process. .

In the course of 2023, a transition stage of the program will be carried out, in order to assign subsidies to families that already have approved credit, have completed their real estate business and meet the requirements of the program. On April 15, the first cut for assignments will be made, which will be published on Monday, April 17.

(See: What to do if you want to rent your home while you travel.)

In addition, the ministry decided to adjust the classification requirement for Sisbén IV so that more households can apply. Therefore, there will be a single criterion at the national level, so that households classified between subgroups A1 and D20 may apply to be beneficiaries.

those households classified between subgroups A1 and C8 will receive an initial installment subsidy of 34.8 million pesos, and households between C9 and D20 will be granted an aid of 23.2 million pesos, taking into account that the minimum wage for this year is 1.16 million pesos.

My House Already

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The president of Camacol, Guillermo Herrera, that another way to promote access to housing is to build new mechanisms so that large institutional investments can develop housing projects Social Interest Housing (VIS) to rent, especially for those lower-income households that today spend more than what they meet on rent and that do not meet the necessary conditions to contract a mortgage loan.

“This is a proposal where however the household has to become the owner. In Colombia there is a VIS leasing market by natural persons who buy as an investment, but we believe that this can be further raised to have fiduciary mechanisms or real estate funds that can promote this on a large scale.”, he explained.

LINA QUIROGA BLONDE
WEATHER – ECONOMY AND BUSINESS