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.