The sales of social interest housing (VIS) in Colombia They have been in free fall for 15 months, since March 2022, but this decline has deepened since October last year when the delivery of subsidies from Mi Casa Ya.
While in May of last year 16,232 units were sold, in the same month of 2023 only 5,561 were sold, which means a reduction of 66 percent. These are figures similar to those registered in April 2020, the hardest month of the covid-19 pandemic.
(Also read: Housing sales in Bogotá until May are among the lowest in four years)
Guillermo Herrera Castaño, president of Camacol.
“This is not a movement typical of the cycles of the sectorIt is a situation that, beyond macroeconomic conditions, requires measures to reactivate the sector, especially now that macroeconomic conditions are beginning to show signs of improvement,” said the president of camacol, guillermo herrera.
It is a situation that, beyond macroeconomic conditions, requires measures to reactivate the sector
For this reason, Camacol is making three proposals to the National Government in order to once again raise the figures for home sales and reactivate this sector, which is key to the country’s economy.
The first is to catch up with the Program My House Now. According to government announcements, with the budget addition of 1.01 trillion pesos, 2.24 trillion pesos would be achieved for this program, which would make it possible to disburse 75,000 subsidies this year. Additionally, there will be 52,000 hedges at the interest rate for 2023 and 8,000 for 2024.
However, Camacol’s accounts indicate that at least 90,000 down payment subsidies are required and interest rate hedges to cover household demand.
(Also read: Advantages of buying a new home off plans in Colombia)
This means that there is a deficit of 15,000 subsidies for the initial fee and 33,000 coverage. To cover these shortfalls, it is required that in the budget addition approximately 300,000 million pesos more will be guaranteed so that the families that receive their home this year can count on the provision of this subsidy.
We could reactivate the sector with investments that exceed 16.3 trillion pesos
The second proposal bet on working on the countercyclical strategy announced by the President Gustavo Petrothat must be presented to the sector, so that it can be promoted in an articulated way to stimulate the start of works.
The union leader assures that it is necessary to appropriate the budgetary resources for 2024 in order to support 108,836 VIS homes that have been in the pre-sale process for more than a year and that have a break-even point above 70 percent.
“If these resources arrive, we will be able to reactivate the sector with investments that exceed 16.3 trillion pesos and that they would contribute 1.1 points to the growth of the national GDP and would generate 218,000 jobs”, said Guillermo Herrera.
The third proposal is guarantee business sustainability with a transition regime so that households that have already bought their homes can continue with their real estate businesses and entrepreneurs can thus close the projects they have and launch others.
(Also read: Fall in entire home sales for 15 months; only 8,196 units were sold in May)
Beyond the drop in sales
Negative numbers in home sales are making a domino effect on the entire sectorsince the initiations and disbursements of credits are also being affected.
If this continues like this, we will have less and less space to build new homes
For the first in a decade, the volume of sales, quarterly average, begins to fall below the level of new home construction. This means that the sector is running out of “gasoline” for the generation of new jobs.
“If this continues like this, each time we are going to have less space to build new homes and that will have an impact on job creation in the sector”, said the president of Camacol.
besides, housing loan disbursements fell 42 percent in the first quarter of the year, mainly due to a 47 percent decrease in loans for new housing. It also stands out that disbursements for the purchase of subsidized housing plummeted 78.8 percent in the first months of 2023.
The cancellation of housing projects increases
Due to the difficulties in generating financial closures, the percentage of canceled VIS projects that were ready to start construction. Between January and May of this year, this percentage rose to 18 percent, compared to 8 percent in the same period in 2022.
There is a great vulnerability of small and medium-sized companies and small regional markets
have been 55 projects throughout the country that had to be canceled due to the difficulties that have been generated by the costs of inputs, interest rates and the uncertainty that the financial closures of homes benefiting from the Mi Casa Ya program have generated.
The departments where more projects have been canceled are Cordoba and Sucre (71 percent)Quindío (63 percent), Santander (50 percent), Boyacá (50 percent) and Caldas (50 percent).
According to the president of Camacol, in the smallest markets and where a greater number of micro, small and medium-sized companies operate, is where more projects are being cancelled. And it is that 92 percent of the companies that develop VIS are MSMEs.
“There is a great vulnerability of small and medium-sized companies and small regional markets due to the difficulties we have had in the development of the sector this year,” he added.
total, 15 of the 20 regional markets analyzed registered cancellationsso they have stopped generating 15,000 direct jobs.
Home sales in Bogotá fell by around 50% in 2023
