“The Impact of Low Demand for New Homes on the Real Estate Market: Insights on Rentals and Used Housing Sales”

2023-05-14 14:24:14

The real estate sector feels the effects of the little demand for new homes that there is, therefore, the rental of houses is not spared either.

The crisis that has been unleashed in the construction sector, where the reduction in sales of new units and the loss of more than 700 jobs are reported in the last quarteris also being felt in the real estate market for used housing that is leased, as stated by César Augusto Londoño Ramírez, owner of the Londoño Ramírez real estate agency, in the city of Armenia, who warned that if there are no new constructions, the The rental market will be very limited and prices will continue to be very high, as has been the case in recent months.

“Right now the situation is still very complicated due to the uncertainty on the part of buyers in making investments, due to changes in government policy, so people are very, very expectant to know what will happen with all these changes Therefore, both the new and the used markets have been very repressed”, expressed Londoño Ramírez.

(See also: The 8 neighborhoods where they will give Bogota residents a home and work: now thousands are very happy)

He said that, in the case of rental housing, a phenomenon is taking place and that is that there is a lot of demandbut there is little supply, which has caused the prices of the properties under this figure to increase considerably in prices.

“The market for renting both houses and apartments is very restricted,” said the owner of the real estate agency.

(See also: Bad news for those who are selling real estate in Colombia: data will leave them cold)

He added that many people are looking for used homes to buy because they have larger areas, They are cheaper and are consolidated constructions. However, the crisis in the sector comes from the previous year and it is not known what will happen in the coming months.

House used by the clouds

According to a Fedelonjas report, the sale price of used housing during 2022 grew 7.7%. From this entity they pointed out that the sale of used housing presents a lower participation rate by financial intermediaries, that is, it is bought with less mortgage credit, in contrast to those registered in the new one.

“This partially isolates the negative effect of today’s high interest rates and is the result of investors seeking refuge so as not to lose purchasing power, since real estate has proven to be the safest and most stable option over the years” , adds Karina Tatiana Reyes Anaya, leader of the union that brings together more than 10,500 real estate agents in the country.

According to Dane, in 2022 the value of disbursements for the acquisition of used housing decreased 30.23% while the new one decreased 19.16%. This is partly explained by the focus on the allocation of subsidies for the homebuying new. The drop in home sales is due to several factors such as the loss of purchasing power of families, high interest rates that generate less amount to lend and, of course, adjustments to VIS subsidies due to lack of budget availability ” , they pointed out from Fedelonjas.

They added: “However, the difficulty of buying new housing is giving used housing more opportunities. On the one hand, families find in the used market a more beneficial price, more generous areas and more location options. In addition, by offering immediate availability, families have a breather because they do not have to pay fees and rent at the same time, which is one of the greatest difficulties for access to their own roof”.

According to the entity, at the beginning of the year, the high demand for rental housing is also noticeable. This increases the demand for rentals in strata 3 and 4 for rent and, therefore, the interest of investors who want to buy because they want to rent.

“Because there are homes that take longer to sell, precisely because of the high interest rates, real estate agents are recommending the owner to lease them to receive income while the market stabilizes to receive income and recover with the appreciation it has. the property”, indicates Karina Reyes, president of Fedelonjas.

#worth #buy #house #Colombia #rents #expensive

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.