Forecasting the 2024 Real Estate Landscape in Key LatAm Countries
In 2024, Brazil, Mexico, and Colombia will experience a rise in housing prices, driven by inflation and higher credit costs in line with global economic trends.
Fitch Ratings’ report highlights this change in the housing market, noting the influence of low inventory and softened demand due to high mortgage rates.
Brazil’s housing prices are expected to rise by 5.5% in 2023, with a further increase of 4%-6% in 2024.
Mexico anticipates a deceleration in housing price growth, from 9.3% in 2023 to 6%-8% in 2024.
Colombia’s housing market, meanwhile, predicts a slowdown in price growth from 12% in 2023 to 5%-7% in 2024.
The risks to these forecasts include economic downturns and rising unemployment rates.
In comparison, the U.S. housing market is expected to see the lowest annual increase since 2019, with a 0%-3% rise in prices in 2024.
Canada’s market will likely see a 3%-5% increase, down from 7% in 2023.
Mortgage delinquency rates in Latin America are also projected to remain stable or slightly increase.
Brazil’s rates are expected to be between 1.75%-2.25%, Mexico’s between 2.5%-3.5%, and Colombia’s between 2%-4% in 2024.
These forecasts are based on improving macroeconomic conditions and stable employment.
The U.S. may see a rise in mortgage delinquency due to economic deterioration and higher unemployment, projected to increase from 1.4% in 2023 to 2%-2.2% in 2024.
Housing deficit is crucial for Latin America
Addressing Latin America’s housing deficit is key, with over 23 million facing shortages and 46 million dealing with quality issues.
ONU-Habitat suggests that housing markets need to cater to a broader population segment.
This approach involves combining various strategies for housing development, informal neighborhood improvements, and promoting differentiated and rental housing.
The decline in housing sales in Latin American markets is linked to factors like rising interest rates and construction costs.
Recovery requires anti-cyclical government measures and diversifying financial instruments to reach vulnerable groups, in line with the New Urban Agenda.