Selling a property now takes over a year in Colombia

Experts estimate that in 2023, a total of 125,600 units will be sold. According to the economic growth data presented by the National Administrative Department of Statistics (DANE) on May 15, the construction sector observed a contraction of 3.1% in March of this year. However, the segment of residential and non-residential construction grew by 2.6%, which is significantly lower than the 11.9% growth observed in the same period of 2022.

Meanwhile, figures from the building guild, Camacol, indicated that sales for the first quarter totaled 32,838 units, with a negative variation of 55.3%. Additionally, the contraction in the sales of new housing (Vivienda de Interés Social, VIS, and non-VIS) continued in April, with a 62% decrease compared to the same month in 2022.

In this context, Edwin Chiriví, the manager of Camacol Bogotá and Cundinamarca, cited by the newspaper Portafolio, stated that it currently takes three times longer to sell a property. In April 2022, it took builders 5.3 months to sell a Vivienda de Interés Social (VIS), but now they have to wait an average of up to 16.8 months. For the non-VIS segment, selling a property took 11.6 months in the fourth month of 2022, whereas it now takes up to 21.6 months.

From the perspective of Bancolombia’s economic analysts, sales across the country have been affected by both demand and housing supply factors. The cost of acquiring housing has increased due to high financing rates, rising construction costs, and higher property prices.

The turnover of new housing sales, measured as the time it would take to sell the entire supply, has increased 2.4 times in the past year, according to experts in the real estate sector.

Furthermore, there has been a decrease in the availability of units due to the expiration of subsidies for non-VIS housing and delays in the start of the program for VIS housing.

The willingness to buy housing, as measured by Fedesarrollo, stands at -44.8%. Although this measure has decreased by 3.5 points compared to February, it remains at levels only seen during the pandemic. Bogotá, Cali, and Barranquilla have shown signs of recovery, while Medellín and Bucaramanga have experienced a decline.

The president of Camacol emphasized last week that it is crucial to reactivate construction activity, considering the risks to employment if the current trend is not reversed.

According to the industry leader, the initiation of new VIS construction projects in April decreased by 39% compared to the same month in 2022. “These results should be seen as a warning sign to implement all the sectoral and housing policy actions that allow the volume of activity that has been suspended to resume its construction processes,” he concluded.

Leave a Comment