Colombia sees strong house price rises
Colombia’s house prices rallied by 10.71% (8.21% in real terms) during the year to end-2009, according to the Used Housing Price Index published by the Banco de la Republica Colombia.
House prices have been rising strongly since 2006. Double-digit growth rates were registered until end-2008. In Q1 2009, house price growth moderated to 9.73% (year-on-year), and further slowed to 6.84% in Q2 2009. But in Q3 2009, growth accelerated, and a double-digit increase (10.23%) was again recorded.
The country’s housing market has sailed through the global financial crisis, thanks to improved security conditions, the rise of fixed-rate mortgages, and more cautious investment decisions.
The government’s measures to restore peace and order in Colombia have been generally successful. Consequently, investments have increased and tourism has significantly improved. Despite the global financial crisis, President Uribe proudly announced that Colombia had successfully attracted $8.5 billion-worth of foreign direct investments in 2009. Tourism was the best performing industry in 2009.
The valuable lessons imparted by the Colombian housing market crisis of 1999 have shielded the local market. Buyers financed their home purchases by fixed-rate mortgages. Developers were very careful in initiating construction projects, making sure to supply only just enough.
Colombia’s economy grew 2.45% in Q4 2009, ending the country’s year-long recession. Interest rates remained low at 3%. However, the high jobless rate of 12.40% in April 2010 poses a challenge. Nevertheless, house prices are expected to rise further in 2010.
via Country Overviews | Global Property Guide.
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