Home sales in Colombia continue to decline, dropping 11.9% in January 2025 compared to the same month last year. While sales of publicly subsidized housing have improved from a year ago, the free-market sector continues to struggle.
According to the latest report from the Colombian Construction Chamber (Camacol), 10,891 residential units were sold in January. The subsidized housing sector saw a modest 4.3% increase, marking a potential sign of recovery for the broader market.
Real estate experts attribute the ongoing market contraction to “structural obstacles” and the suspension of the government’s public subsidy program, “Mi Casa Ya”.
Home sales in Colombia and the long road to recovery
The decline in sales is accompanied by a slowdown in new housing developments. However, total sales in January saw a slight 0.9% increase compared to the previous month.
This modest growth was driven mainly by a 4.3% rise in sales of Social Interest Housing (VIS), while the non-VIS segment continued to struggle, recording a 5.9% decline.
In Colombia, housing is categorized as VIS and non-VIS based on price and purpose. VIS homes are designed for low- and middle-income families, with prices regulated by the government. They are typically sold with unfinished interiors.
By 2024, the maximum price cap for a VIS unit in Colombia is approximately 174 million COP (around US$42,000). In major cities like Bogota and Medellin, this cap can reach up to 197 million COP (around US$48,000).
VIS housing offers several advantages, including access to government subsidies, preferential mortgage interest rates, tax exemptions, and reduced notary fees.
Non-VIS housing refers to properties priced above the VIS limit. These homes, typically aimed at higher-income buyers, do not receive subsidies and generally feature superior materials and finishes.
In January 2025, a total of 10,891 housing units were sold—1,094 more than in December but 11.9% fewer than in January 2024. Of these, 6,815 were VIS units, while 4,076 were non-VIS.
Regarding new developments, only 5,672 housing units were launched in January 2025, a significant drop from the 8,164 units recorded in the same month of 2024.
Colombia’s real estate market depends on public subsidies
The data is clear: new housing construction in Colombia has not been this low since 2020, the year of the pandemic. The real estate market has been highly dependent on public subsidies in recent years, especially through the “Mi Casa Ya” program.
This government initiative, implemented to facilitate homeownership, has been fundamental in the sector’s dynamics. Between 2018 and 2020, “Mi Casa Ya” provided an annual average of 33,000 subsidies.
That number increased to 50,000 annual subsidies under Petro administration’s National Development Plan, as reported by then-Housing Minister Catalina Velasco in June 2023.
The year 2021 was particularly significant, with over 227,000 new homes purchased—representing a 28.6% increase from 2020. Of these, more than 162,000 were VIS units, evidencing the key role of subsidies in driving this segment’s growth
However, in December 2024, the government suspended applications for “Mi Casa Ya” due to financial restrictions and the failure of a tax reform that sought to raise 12 trillion COP (US$2.85 billion).
This suspension impacted both prospective homebuyers relying on the subsidy and construction companies, creating uncertainty across the sector. “Mi Casa Ya” offers down payment subsidies and interest rate coverage, significantly lowering financing costs for beneficiaries.
The heavy reliance of Colombia’s real estate market on public subsidies is evident. While these incentives have driven homeownership, the suspension of programs like “Mi Casa Ya” has dealt a significant blow to a market still struggling to recover after two years of crisis.