Analysis of the Real Estate Credit Portfolio and Market in Colombia - Special Financial Stability Reports - Second Half 2022
The main purpose of these reports is to monitor the vulnerabilities and risks of the financial system. Opinions and potential errors are the sole responsibility of the authors, and their contents do not compromise the Board of Directors of Banco de la República (the Central Bank of Colombia).
The Financial Stability Special Reports accompany the publication of the Financial Stability Report and provide a more detailed analysis of some aspects and risks relevant to the stability of the Colombian financial system: market liquidity risk, market risk, credit risk, financial burden, loan portfolio, and housing market in Colombia, international indicators, concentration, and competition in the deposit and credit markets, corporate sector surveys, and financial inclusion.
In a macroeconomic context of high inflation and high interest rates, demand for new housing units has weakened while supply has shown slight signs of recovery. This has reduced the pressures on new housing prices that have been reported in previous editions of this report. When considering a price index that controls for the characteristics of residential units, prices keep rising after adjusting for inflation. Additionally, there was a lower dynamic in credit disbursements for home acquisition, in line with a lower willingness to purchase these assets. In particular, credit disbursements for home acquisition of non-low-income housing (non-VIS) showed a lower growth rate, while the low-income housing (VIS in Spanish) segment continued to show a growing dynamic. In turn, credit disbursements for housing construction maintained a positive growth rate. In terms of interest rates, both home acquisition and housing construction credit disbursements moved in the same direction, in line with a higher monetary policy rate.
