The supply of residential housing in Colombia’s major cities has not kept pace with demand, creating an imbalance that will not be solved in the near term. This urban housing deficit has pushed the rate of price growth above that of salary growth in the last few years, according to a Fitch Ratings report.

“Prices seem inflated in high-end neighborhoods. But the current housing finance system is characterized by conservative lending standards and high levels of borrower equity, which, we believe, minimize downside credit risks of a hot market”

“Prices seem inflated in high-end neighborhoods. But the current housing finance system is characterized by conservative lending standards and high levels of borrower equity, which, we believe, minimize downside credit risks of a hot market,” said Maria Paula Moreno, Senior Director.

Fitch considers the risk of house price declines when analyzing residential mortgage backed securities (RMBS) transactions and believes its current RMBS rating stresses remain appropriate given current market conditions.

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Colombia’s residential real estate market is cooling after a decade of rising prices stretched families’ ability to buy a new home, the nation’s housing chief said.

The number of new high-end housing developments has fallen, while builders are taking longer to sell homes in projects coming onto the market, according to Housing Minister Luis Felipe Henao. These may be early signs that a period of rapid price increases is coming to an end, he said.

“The market is calming in terms of prices,” Henao said yesterday in an interview in Bogota. “People are no longer taking the decision to buy so quickly, because it seems expensive. They are shopping around more before buying, and there’s not so much demand, so prices are reaching an equilibrium.”

Home prices rose to a record high last year in inflation-adjusted terms, according to the central bank, prompting Yale University’s Robert Shiller to say Colombia’s housing market reminded him of the inflating U.S. bubble a decade earlier. The Andean nation’s conservative lending rules and low levels of mortgage debt will prevent a house price crash, according to Henao.

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Brazil is one of the world’s most exciting emerging property markets for investors looking for buy to let real estate that brings in a regular income, according to a new report.

The report highlights how this years FIFA World Cup and the 2016 Olympic Games means that the country will attract more visitors which increases rental prospects in the major cities, especially those hosting these sporting events.

The information in the report from Colordarcy is gathered from several independent sources, to give a clear overview of the main property hotspots and the kind of returns investors can expect, according to managing director Loxley McKenzie.

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Property prices not expected to fall in Brazil in 2014

Tuesday, 11 February 2014

Real estate prices in Brazil have been cooling since the end of 2011 but they are not expected to decrease in 2014 due to supply and demand inbalances, according to a new report.However, although statistical data are scarce and there is a wide dispersion of prices and incomes, available information shows that residential properties in large metropolitan areas have become very expensive for the broader middle classes. The most up to date analysis of the housing market from Fitch Ratings points out that for many property is only accessible through high leverage and long term financing of up to 35 years. ‘This explains the slowdown of income adjusted price increases in the last two years to a cumulated 10%. Rental yields have fallen to levels below low risk investments and are sharply below mortgage rates,’ it points out.   Read More