miércoles, 1 de mayo de 2013
Colombian banker unsure if house-price hikes signal bubble
The head of the Central Bank in Colombia said on 30 April that it was very difficult to discern the emergence of a property bubble in Colombia in spite of the "historic maximum levels" prices had attained in certain cities including the capital Bogotá. His comments nevertheless corroborated the ongoing concerns and similar observations made recently on the relentless rise in property prices in parts of Colombia. José Darío Uribe told RCN radio that prices were rising for factors that included a shortage, in places like Bogotá, of construction space, but that buyers only borrowed half the value of purchased properties, limiting their exposure to debt; this he said "is comforting" as it limited private debt. Uribe said "it is very difficult to tell if the price of an asset, in this case housing, has reached an unsustainable level. The fact is that we have the highest prices in history" and that Bogotá is "where the indicator of house prices has risen most." He observed "this is not a bubble, at least not for now," but warned "it is very difficult to identify bubbles and it is identified at the moment when it bursts and prices collapse," RCN La Radio reported. Earlier certain observers were critical of the government's stated decision to subsidise a reduction in banks' mortgage lending rates for middle-income families as this could further "heat up" the market. The Finance Minister Mauricio Cárdenas Santamaría announced on 15 April that banks would reduce this rate from 12 to seven per cent, as part of a government plan to stimulate economic growth, Portafolio and Bloomberg reported on 23 April. The price index of second-hand housing in Colombia reached 119.71 points at the end of 2012, rising 12.4 per cent in its last three months and this was the highest quarterly rise since 2007, Bloomberg reported, citing the Central Bank. The Bank began to compile housing-sector figures in 1988.