Rates and loans will make it cheaper to buy a new home than pay rent


One of the main challenges for the construction sector in 2024 will be recovery. New home acquisition figures are expected to improve, with the Bank of the Republic cutting interest rates, marking the completion of 10 months of declining inflation.

Luis Aurelio Diaz, president of Grupo Oikos, believes that, if the CPI and issuer rates continue to fall, it could be cheaper to buy new housing rather than rent this year.

How much can interest rates fall on loans to buy a home?

Today banks are giving loans for 30 years, they did not do this earlier because they used to give loans for 12 or 15 years, so When a bank is offering a loan for that period today, it makes the fees below the lease very competitive.

We are already starting to see a significant decline in rates, which we expect will consolidate by the second half of the year, which will mean that the combination of very competitive rates and the issue of a 30-year loan can actually generate tranches. What they can do is reduce the rental price by at least 20% or 30%.

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What will be the fall in rates?

I believe that at the end of the year the Bank of the Republic will set the rate around 10% or 9.8% Which means there are clearly some very competitive types on the market.

See in figures, how much or how much will this recovery of the construction sector be?

I believe that this next year is going to be better by 2023 and we hope that the figures will reach more than 150,000 units.

There will be more dynamism in the opening of new projects this year, certainly not what we saw two or three years ago, but certainly, as the inventory is flying and going, it will allow builders to gradually open up new projects. Will inspire to bring projects. And adopt a dynamic. That dynamics will actually start to pick up significantly again around 2025, but 2024 will start to pick up launch dynamics again.

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What happened to used housing and what impact will it have with price increases in 2023? How will things be in the future?

Typically when there is high inflation, builders are the first to feel the inflation as they purchase new materials; In second-hand housing, as it has already been built, it takes at least one and a half to two years for the second-hand house to realize the inflation problem of the new house.

Once you realize that, prices obviously go up because new housing is much more expensive, but, There is a period of about three years where second-hand housing is much cheaper than the cost of building it.

What are you proposing for people who can’t or don’t have access to Mi Casa Ya?

Well, it depends on which segment you are attacking. Certainly there is a class that needs recurring subsidies, but there is also a very large class that Compensation fund subsidies can help you achieve financial closure, especially thinking about 30-year loans and the rates going down.

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So I believe that a large part of the market and at least in our case, we are going to focus on that segment of subsidy, only the compensation fund, however, we hope that the government will make a big effort for recurring subsidy. The Mi Casa has already managed to reach the lower segment.

Are you going to be looking for people who have decided not to continue with the purchase of a new home?

Without a doubt and not just a plan; I believe the housing deficit in Colombia is very high, and in the end everyone wants to own a home, the issue is at what price? At what cost? At what rate? And in how much time?, but, Certainly, the more we explain to them, people will realize that there is no better deal than buying a home instead of renting.


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