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.