The drop in home sales has already exceeded the year - Sectors

During this year there has been a significant drop in home purchases. Either due to the increase in construction costs or the uncertainty due to the continuity of the subsidy programs, The months in which sales records were reported, as occurred in the first half of 2022, are now history and Colombians are increasingly avoiding the purchase of their own home, which is causing great concern in the construction sector.

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According to figures from the Colombian Chamber of Construction (Camacol) only between March and April of this year, new home sales (VIS and Non-Vis) registered a fall of 12.1 percent.

This contraction is not new. Since last year, the housing market has presented results with a downward trend. According to the Coordenada Urbana report, Camacol’s georeferenced information system, The reduction began in March 2022, when 23,482 new homes were sold, 2,456 fewer compared to the 25,938 units sold in February of that year.

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The year-on-year contraction sometimes exceeds 50 percent.

Since that month, the market has suffered a constant fall that is around en averages 7.5 percent per month, year-over-year, the picture is bleaker, because sometimes the contraction has exceeded 50 percent of the volume of the market.

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The most recent loss was destroyed in the results obtained in April of this year. In the specific case of Social Interest Housing (VIS), 5,674 units were sold, that is, 11,117 less compared to the same month last year, which means a decrease of 66 percent. For its part, the Non-VIS segment sold 2,980 homes, 3,003 less than in April 2022, with a reduction of 50.19 percent.

Between April 2022 and April 2023, 209,190 new homes were sold

If the total annual results are compared, according to the figures, between April 2022 and April 2023, 209,190 new homes were sold, 79,811 units less than the 289,001 sold in the same period between 2021 and 2022which is equivalent to an annual loss of 27.62 percent.

The Monetary Policy report of the Banco de la República explains that this trend could be associated with the depletion of the factors that drove the market between 2021 and mid-2022.

According to the document, “uncertainty about the continuity of the housing acquisition subsidy programs and the termination of some of them would have moderated the purchase intention of households. myIn the case of the VIS segment, the early termination of the Mi Casa Ya program subsidies for 2022 and the changes announced in the access requirements for beneficiaries would explain, to a large extent, the lower sales”.

Another of those responsible for the contraction could be the increase in the price of inputs. According to data from the National Administrative Department of Statistics (Dane), lThe costs of building construction rose 7.93 so far this year, with a cutoff in March. The groups of labor, machinery and materials were the ones that increased their prices the most.

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Labor, machinery and materials were the ones that increased their price the most.

Photo:

Bogota City Hall

All these factors have affected the processes within the construction companies, only in terms of new works, lhe initiation of VIS housing construction in April will reach 39 percent, compared to the same month of 2022.

The president of Camacol, Guillermo Herrera, added that the time to market a social housing in the country has doubled, Well, in April of the previous year it was five months and in February of this year it went up to more than 10 months.s, the highest since 2012. Similarly, the inventory of unsold finished homes has been increasing. In February of this year, the indicator stood at 1.7 percent, a figure not seen for 10 years.

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This situation generates concern from the sector, because if the construction activity is not reactivated and the current trend is reversed, the job offer could be profoundly affected, explains Herrera. “These results should be seen as an alert signal to launch all sectoral policy actions and housing that allow the volume of activity that suspended its construction processes.” he concluded.

From the Oikos Business Group they see the recovery of the sector with optimism. Its president, Luis Aurelio Díaz, consider that the prices of some inputs could be normalizing towards Junewhich suggests that there will be a very promising second semester for the development of construction.

Juan David Cano Lopera
School of Multimedia Journalism EL TIEMPO