As the number of visitors, investors and entrepreneurs increasingly come to Colombia to see all the new construction going on everywhere in many, one of the first questions that everyone is asking is: “Is overbuilding in British C”? too much inventory? the housing market is overvalued? Could this housing bubble? “The answer to all the above are not (or, more accurately, not yet).
Colombia has a very favorable international publicity since 2007, five years after the administration of former President Alvaro Uribe, who did everything to ensure the safety issues that have become the bane of urban existence in Colombia 80s and 90s.
As a matter of fact, since 2002, real estate prices rise across the country. This year alone, only to jump up to 20 or 25%. In many parts of Colombia 2003-2007 annual benefit was observed along the lines of 10-15%. During the global recession, many Western countries have seen real estate prices have sunk at 30-50%, Colombia remains essentially the status quo. Colombian region came relatively unscathed because he had hidden in the global economy for years.
In Medellin, for example, it is essentially a part of the market in 2007, in 2009. Sales remained normal for a bit and not really up and down right now. But then the year 2010 saw an increase of 5.8% in prices followed by 6.2% in 2011 and 5.9 in 2012. This does not mean that a single event in Medellin.
Thus, there is a housing bubble?
This is a question many people ask of Medellin, as there are many large buildings preconstruction now, the whole city, especially in the version of Beverly Hills Medellin, El Poblado. More often than not, people are asking “how can you continue to build this stock? You may not be able to do to support that the price should fall.”
Here are some reasons why many experts believe that there is not just the absence of bubbles in Colombia, but now is the best time to buy real estate, particularly in Medellin:
· Housing bubbles have a number of different characteristics were measured by a number of financial metrics such as price to earnings, the affordability index, income deposits, housing loans for income, etc. . Medellin, and I feel many parts of Colombia, see a decrease in the level of poverty and the middle class, so that more people can afford homes, and demand will increase.
· Most wages are determined by the annual inflation rate of about 4-8% for 2009-2012 and from 2002 to 2008 ranged from 3.4%. Thus, over 50% of the price increase a year in products offset by higher annual salary of a property indexed to the national inflation rate. Therefore, there is no sign of leakage increases the premium size.
· The five characteristics housing bubble was the displacement, boom, euphoria, the profit taking and panic. Colombia is only now in an expansion phase. It involves many steps left to go before there is a bubble.
And “wild card” – what happens when the world wakes up and learn the truth about this great country and it is wise to invest here and securities denominated in Colombian pesos and does not reduce the dollar?
Some experts, based on the above reasons and many others, believe that “the impending apocalypse British bubble” has no meaning. The demand for real estate that exceeds the ability to provide to meet the demand appears completely impossible to grow because this country has an economy that seems strong, the high-performance market share, foreign direct investment increased staggering 20-30%, exports gold, silver, oil, gas, coal, hydropower and major agricultural products, annual growth of 4.6% of GDP, low inflation and a growth rate of the middle class.