In the midst of the reasonable and necessary concern caused by the first news about the arrival of covid-19 in Colombia and its rapid expansion, there was an interesting fact that went unnoticed: the 30 billion pesos that banks will have available to finance construction and purchase of housing in the country in the coming years.
The figure was revealed by Jorge Castaño Gutiérrez, Financial Superintendent, during his speech at the 11th Housing Forum, organized by the Banking Association and Financial Institutions (Asobancaria) in mid-February.
The resources, said the official, will come from the lesser need that credit institutions will have to leave capital ‘frozen’ due to changes in solvency rules (Basel III), against which Colombian entities are well above the minimums required today (9 percent) and those that will have to be met as of next year, starting from 10.5 percent (solvency level).
“The lower consumption of capital for the financial system could boost the placement of loans (in housing) in about 30 trillion pesos,” said the official.
The announcement comes just when the construction industry is not going through one of its best moments.
Last year ended with a fall of 1.3 percent, while the economy advanced 3.3 percent, according to figures from the National Administrative Department of Statistics (Dane), which leaves a favorable space for the demand for resources to the construction and housing sector.
But it is not the only thing. Also read write for us tech blog. There are also interest rates, today at historically low levels in the last 15 years.
Until the beginning of last March, a Colombian family could finance the purchase of an affordable housing (VIS) at an effective annual average cost of 11.6 percent, while a non-VIS, at 10.3 percent, reveals the Financial Supervision.
Added to this are factors such as the fact that more and more people are acquiring a second home as an investment, that used home financing is skyrocketing, that mortgage debtors are not only better protected, but that they are complying with their obligations and that the Government is committed to supporting the construction sector through programs such as Mi Casa Ya, Frech II and Semillero de Propietarios until 2025, among others.
Panorama
Although the current situation does not give us to think that people will go out to demand resources in their hands full to buy a house at this time, nor that entities will focus their immediate efforts to provide them, Also read write for us “tech blog”. without a doubt the emergency due to the pandemic will pass sooner rather than later, so the economy will have to resume its course and with it the building dynamics.
The sector starts from a mixed balance sheet, as perceived by the bankers themselves.
Although construction ended last year in negative territory, which included a 7.7 percent deterioration in the added value of residential and non-residential buildings, the 10.9 percent increase in units sold and of 12 percent in its nominal value, “a trend that seems to be strengthened in the first figures of 2020”, they warn in the Asobancaria.
Another positive point is the growth of the mortgage portfolio, of 6.8 percent, the second highest after consumer loans, Also read write for us. and the change in the trend in the deterioration of these loans, whose growth went from levels close to 15 percent to mid-2019 to only 6.8 percent at the end of that same year.
“In the VIS, both the builders associated with that market and its demand are doing very well due to the programs of the Ministry of Housing to accumulate subsidies, and the possibility of adjusting the price of VIS housing makes that portfolio move well. Where we see peaks of deterioration and concern is in the one other than VIS, where, in some particular cases, some operations were not being paid, but that trend has begun to correct ”, complements the superfinancial.
And he adds that in terms of financing new and used housing there have been different moments, because while in June 2017 77 percent of the disbursements were for new housing and 23 percent for used, today that composition has changed to 50-50.
Builders
The bankers do not doubt in front of a good perspective regarding the financing to the constructors, especially considering the decisions to maintain the incentives to finance the VIS, the clarity of the income exemption of the AFC and the elimination of non-consumption in homes of more than 918 million pesos, included in the recent tax reform.
But they warn that to consolidate the momentum that this segment needs in terms of financing, it is necessary to adopt technologies for the digitization and monitoring of public documents, the implementation of channels to report irregularities during the process that the initial stage of property approval must take place. , designs and licenses; the review of the real financial health in the programmed payments of initial installments, as well as the maintenance of the support programs for people with lower incomes, among others, according to the Asobancaria.
