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The Housing Market in Colombia: Socioeconomic and Financial Determinants

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  • Clavijo, Sergio
  • Janna, Michel
  • Muñoz, Santiago

Abstract

This document provides an overview of the housing system in Colombia, exploring its socioeconomic and financial determinants and offering recommendations to improve the collection of basic data on the construction sector, household socioeconomic conditions, and mortgage markets. The paper also estimates a simultaneous econometric model for the country's housing market using quarterly data over the period 1991-2004. On the demand side, we find that the area of approved licenses is highly elastic to households' disposable income, new housing prices and real interest rates on mortgage credit. On the supply side, we find high input-cost elasticity and a moderate response to wealth effects. These results prove to be robust to different proxies and diverse estimation procedures.

Suggested Citation

  • Clavijo, Sergio & Janna, Michel & Muñoz, Santiago, 2005. "The Housing Market in Colombia: Socioeconomic and Financial Determinants," IDB Publications (Working Papers) 1548, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:1548
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    References listed on IDEAS

    as
    1. Mauricio Cardenas & Alejandro Badel, 2003. "La crisis de financiamiento hipotecario en Colombia: Causas y consecuencias," Research Department Publications 4355, Inter-American Development Bank, Research Department.
    2. Kostas Tsatsaronis & Haibin Zhu, 2004. "What drives housing price dynamics: cross-country evidence," BIS Quarterly Review, Bank for International Settlements, March.
    3. Joshua H. Gallin, 2003. "The long-run relationship between house prices and income: evidence from local housing markets," Finance and Economics Discussion Series 2003-17, Board of Governors of the Federal Reserve System (U.S.).
    4. Caplin, Andrew & Freeman, Charles & Tracy, Joseph, 1997. "Collateral Damage: Refinancing Constraints and Regional Recessions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(4), pages 496-516, November.
    5. Muellbauer, John & Murphy, Anthony, 1997. "Booms and Busts in the UK Housing Market," Economic Journal, Royal Economic Society, vol. 107(445), pages 1701-1727, November.
    6. Mauricio Cárdenas & Alejandro Badel F., 2003. "La crisis de financiamiento hipotecario en Colombia: causas y consecuencias," Coyuntura Económica, Fedesarrollo, September.
    7. Szalachman, Raquel, 2000. "Perfil de déficit y políticas de vivienda de interés social: situación de algunos países de la región en los noventa," Financiamiento para el Desarrollo 5080, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    8. Peter J. Brady & Glenn B. Canner & Dean M. Maki, 2000. "The effects of recent mortgage refinancing," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), vol. 7(Jul), pages 441-450.
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    Cited by:

    1. María Angélica Arbeláez & Roberto Steiner & Alejandro Becerra & Daniel Wills, 2011. "Housing tenure and housing demand in Colombia," Working Papers Series. Documentos de Trabajo 9067, Fedesarrollo.
    2. Garabato, Natalia & Ramada, Magdalena, 2011. "Housing Markets in Uruguay: Determinants of Housing Demand and Its Interaction with Public Policies," IDB Publications (Working Papers) 3811, Inter-American Development Bank.

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    More about this item

    Keywords

    WP-522;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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