Housing Finance and Real Estate Markets in Colombia

A new IMF working paper on Colombia says that:

“Overall, risks from the housing market seem to be contained. While the results from the VAR model suggest that a negative house price shock could have sizable implications on activity (GDP, consumption and investment), house prices do not seem to be largely above levels justified by economic fundamentals (the average estimated gap is at 13 percent). Moreover, after the 1999 financial crisis the authorities have adopted macroprudential measures such as the use of LTV limits, which together with other housing financing characteristics, limit the vulnerabilities stemming from the housing market. At the same time, the current slowdown in economic activity should decelerate mortgage growth and impact the growth of house prices, which has started to show some signs of weakening. However, the authorities should continue to monitor closely the developments in credit and house price growth.”

Fig1

Fig2

Posted by at 6:40 PM

Labels: Housing

Home

Subscribe to: Posts