The drop in home sales that the country has suffered is the result of a challenging macroeconomic outlook. Households struggle between stretching money and surfing the uncertainty of real estate subsidies to access their dream of owning their own home.
However, after a prolonged struggle since the pandemic, this year Colombian families no longer see it as a convenient time to buy a home. In this way, the market has been suffering and the willingness to buy is falling more and more.
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According to Fedesarrollo Consumer Opinion SurveyAlthough in March a slight annual improvement was outlined in the real estate appetite, even 44.8% of households have not contemplated buying a home. It is worth remembering that in February the figure fell 48.3%, which shows a growth of 3.5 percentage points in the third month of the year.
By socioeconomic levels, both the middle and low strata were optimistic compared to the previous month, going from a monthly variation of -49.3% to -47% and from -45.8% to -38.7% respectively, which represents , that although economic difficulties are still perceived, more and more households find it viable to acquire a home. On the contrary, the high socioeconomic segment reflects a greater pessimism than the previous month. For February, 64.9% of households in this category were not contemplating buying a home and for March the number of households increased 23.1 pp to 88%.
“Less sales implies fewer starts of work, and therefore the sector’s ability to generate employment and the demand for inputs of half of the regional economy that supplies the works may be put at risk”, he explained Edwin Chiriví, manager of Camacol Bogotá and Cundinamarca about the dynamics.
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These figures represent a considerable drop in buying appetite, they may even be close to those due to the covid 19 crisis, where the variation was -62%. For the 2008 Subprime Crisis, it barely fell 1.7%.
In all these historical milestones, although the purchase intention was low, sales did not fall by more than a quarter. Now, with a willingness to buy that falls and borders on 50%, there are drops in sales, as is the case of Social Interest Housing (VIS) of more than 58%.
“This strong dynamic of contraction is mainly explained by the current interest rate conditions. It is expected that, in perspective, the recent announcements by the National Government on the reactivation of the Mi Casa Ya Program and the planned expansion of new resources will contribute to significantly reversing this trend.”, explained the manager of Camacol Bogotá and Cundinamarca.
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According to the president of Camacol, Guillermo Herrera, in the last twelve months, to March, less than 200,000 new homes were sold, which represented a drop of 25.4% compared to the previous period. Of these, 142,950 were VIS, which also decreased by 25.4% annually.
“We are experiencing an atypical condition, outside the cycle of the last decade, which requires continuing with the actions of the Government and the private sector to encourage a new countercyclical strategy that, by reactivating the sector, is decisive for employmentHerrera said.
If this dynamic continues, Camacol plans to sell 100,000 VIS units. In 2022, 172,000 were sold.
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PAULA GALEANO BALAGUERA
Portfolio Journalist