Colombia’s Housing Market Faces 11.9% Sales Drop Amid Policy and Economic Pressures

Colombia’s housing sector continues to face significant difficulties, with January 2025 sales dropping 11.9% compared to the same month in 2024, according to Camacol, the Colombian Chamber of Construction.

Only 10,891 units were sold this January, down from 12,361 last year. Despite this annual decline, a slight monthly improvement was seen as December 2024 recorded just 9,797 sales.

Social housing (VIS), which constitutes a large portion of the market, experienced a sharp 19.7% drop in annual sales, falling from 8,486 units in January 2024 to 6,815 this year. However, the non-VIS segment showed resilience, growing by 5.2%, with sales rising from 3,875 to 4,076 units over the same period.

The challenges extend beyond sales figures. New housing project launches fell by 30.5% in January 2025 compared to the previous year. This marked the lowest level since records began.

Construction starts also dropped dramatically by 55.2%, signaling a slowdown in future supply. Bogotá and Cundinamarca saw even steeper declines than the national average, with total housing sales plummeting by 38%.

VIS transactions in Bogotá alone dropped from 3,841 units in January 2024 to just 2,382 this year. Economic pressures have compounded these issues. High inflation and elevated interest rates have reduced mortgage affordability for many Colombians.

Colombia’s Housing Market Faces Challenges

The Banco de la República has kept intervention rates high to combat inflation, limiting banks’ ability to lower mortgage rates further. Policy uncertainty has also played a role; the “Mi Casa Ya” subsidy program was discontinued in December 2024 and is yet to be replaced with a clear alternative.

Despite these challenges, there are glimmers of hope. The non-VIS segment is showing growth due to increased demand from middle-class buyers seeking better financing options and urban renewal projects.

Developers are focusing on mid-to-high-end housing as urbanization drives demand in cities like Bogotá and Medellín. Camacol projects housing sales for 2025 will remain near last year’s levels at around 150,000 units.

However, experts warn that government budget cuts and delays in subsidy programs could further strain the sector. The market’s recovery depends on clearer policies and improved economic conditions to restore confidence among buyers and developers alike.