The Housing Market in Colombia: Socioeconomic and Financial Determinants

Peer Reviewed icon Peer Reviewed
Author
Clavijo, Sergio ;
Janna, Michel ;
Muñoz, Santiago
Date issued
Jan 2005
Subject
Financial Sector
JEL code
E44 - Financial Markets and the Macroeconomy;
G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages;
R21 - Housing Demand
Country
Colombia
Category
Working Papers
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.