Homes would become more expensive 4.3% in the next six months

Home sales are not going through their best moment in 2023. This situation is the product of the continuous sociopolitical crisis that the country has been facing since December 2022, added to the rise in housing prices. Construction materials and the increases in interest rates, maintains the Peruvian Chamber of Construction (Capeco).

Such is the case that during the first two months of the year, the sale of homes fell by 4.3%according to the last Construction Economic Report (IEC) carried out by the business association. The most pronounced decrease was registered in own-roof homes, which fell by -14.5%, followed by Mivivienda Verde (-8.0) and the non-social segment with -2.3%.

The situation is also pessimistic for the next two months of the year, where sales are also expected to drop by an average of -3.7% compared to the same period in 2022. The placements of Techo Propio and Mivivienda Verde would continue to be the most affected with a retracement of -27.3% and -5.7%, respectively. The only positive segment would be Traditional Home with a slight advance of just 0.5%.

At the discretion of Guido ValdiviaCEO of Capeco, the recovery of the sales rhythm will depend on how the current socio-political crisis is resolved and the level of confidence is restored, which according to their estimates would occur in the second half of the year. In this way, in an optimistic scenario, he foresees that placements could close the year with a growth of between 2% and 3%.

Prices will continue to rise

Between September 2022 and so far in February 2023, home prices increased by 4.3%. In addition, this trend is expected to continue in the next moving semester (March 2023-August 2023), since an increase of 3.4% is expected, according to the latest Outlook Survey conducted by Capeco.

A similar scenario is observed in terms of expectations regarding the variation in the prices of construction materials, in which it is expected that after having risen around 3.4% between September of last year and this month, it will register a rebound of 5.8% in the next six months.

municipal restrictions

On the other hand, another factor that would hinder the recovery of the subsector in the coming months would be the willingness of some municipalities to prohibit or condition the construction of social housing (VIS) in their jurisdictions, because it will also affect the supply of non-social housing. According to Valdivia, this is due to the fact that these constructions propose mixed projects, that is, they include a percentage of homes inside and outside the VIS range. Thus, if said fraction is not carried out, therefore, the project is non-viable.

mortgage loans fell

During 2022, 39,895 mortgage loans were granted, which meant a contraction of -19.4% compared to 2021. However, while the loans disbursed by financial institutions with their lines of credit fell by 28.0%, the of the Mivivienda Fund increased by 4.9%.

While, the average credit of the operations financed by Mivivienda was S/166,270higher by 19.5% compared to the previous annual period, says Capeco.

Approach:

Guido Valdivia, Executive Director of Capeco:

“We assume that the non-social housing market, which has fallen for two consecutive years, should no longer fall because the majority of buyers are people who need housing.”