Home sales fall 11% while their prices rose 3.9%

At the end of the first semester, the real estate market seems headed for an inauspicious year, according to the latest report from the Peruvian Chamber of Construction (Capeco).

In said period there was a drop of 11% in the sale of new homes in Metropolitan Lima, compared to the first half of 2022.

By segment, low-income housing, linked to Techo Propio and Mivivienda, fell 75.6% and 4.9%, respectively. In the rest of the sector, transactions fell by 12.2%.

Guido Valdivia, executive director of Capecopointed out that the decrease in sales was stronger in the Modern Lima and East Lima sectors (see infographic), mainly in the first group, due to “problems with municipalities”, he added, referring to the restrictions in communes such as Miraflores and San Isidro, where obstacles have been placed on the construction of low-income housing.

Another factor that limits the sale of real estate is the high prices. In the first 6 months, the average value of the square meter (m²) reached S/7,304, 3.9% more than in the first half of the previous year.

They ask not to transgress social programs

Since July of last year, 32,254 home mortgage loans have been disbursed, 24.3% less than in the immediately preceding annual period. However, there is a 19.2% rise in the placement of credits for myhomeand a drop of 39.7% in those of financial institutions.

Valdivia points out that Mivivienda now participates in 4 out of 10 loans in the real estate sectorand it is key to reversing the bank’s fall, although “it is worrying that they want to change the FMV rules suddenly.”

It is worth clarifying that in July the Good Payer Bonus (BBP) was reduced from S/10,800 to S/7,300 to pay for housing prices from S/232,200 to S/343,900 (Range 4), while, for those who aim to a property between S/343,900 and S/464,200 (Range 5), they will no longer be financed up to 90% of the value, but will only be set a rate in soles and they will be provided with a Credit Risk Coverage (CRC) service. .

In a context in which the Mivivienda Fund —after the corruption scandal with Markagroup— launched measures such as the Bono Canon and the Bono de Integración (adhered to the BBP), Valdivia considers that “they are difficult to achieve despite their laudable purpose”, since that the most needy people “will hardly be able to access bank financing even if two subsidies are added.”

In addition, after modifying the Mivivienda BBP, they bet “by untimely measures” since the state program has permeated these market segments; and for this reason, it foresees that sales in “ranges 4 and 5” will be reduced and they will not be placed in the vulnerable segments that it is desired to serve. “Social housing has also been affected by increases in construction costs,” he concluded.

Construction would close the year in negative

From Capeco, they estimate that the production of the construction sector would have fallen 4.9% in July due to the negative performance of cement consumption in 12 of the last 13 months; and for the end of the year, they anticipate a drop of 3.3%.

And if it is expected to reach at least 0% in 2023, it must be grow 9.3% from August to December; although it would be complicated, considering that infrastructure (-5.1%), builders (-2.3%) and suppliers (-2.6%) continue to be negative, according to the construction union.

More data

Collapse. Mining investment fell 19.2% in the first half of the year.

Collateral. little more than 353,000 people work in construction to the May-July quarter, dragging a decrease of 10 quarters in a row. The rate stands at -19.3%.

Home sales drop in the capital market