In Colombia, more than 21 million people live in rental or subrental housing, which is equivalent to 40% of the country’s households. This was shown by the National Quality of Life Survey (ECV) and analyses of the real estate sector. The ECV also indicates that in 2018, 34% of households lived in rental housing. The structural transformation over the years in housing preferences is clear, associated with economic conditions, labor dynamics, and changes in household composition.
In other words, Colombia is becoming a country of renters, among other reasons, due to the high costs of buying housing. But also because of greater restrictions on access to mortgage credit and the drop in sales of social-interest housing between 2023 and 2024, as a result of a policy from the administration of President Gustavo Petro.
Related: Petro’s Meeting with Westcol Becomes a Social Media Hit in Colombia.
More reasons why Colombia is a country of renters
Among the factors that most influence this situation is the financial environment. High interest rates, explains the newspaper Portafolio, combined with the requirement to have savings close to 30% of the property value, have limited the possibility of purchasing, especially for households in strata 1, 2, and 3, whose incomes have not increased at the same rate as inflation.
But there is more. Paola Suarez, Vice President of Marketing at Seguros Bolívar and of the real estate ecosystem El Libertador – Ciencuadras, stated, cited by the same economic outlet, that the growth of rentals is also influenced by “new labor and lifestyle dynamics such as increased mobility, telework, and the need for flexibility.”
As if that were not enough, there are also statements by President Gustavo Petro, which have a profound influence among his followers, and which discourage the purchase of one’s own home. For Petro, buying housing in Colombia is a matter for “fools.” He said this at his most recent cabinet meeting, where, paradoxically, he addressed his Minister of Housing, City, and Territory, Helga María Rivas Ardila:
“We need another conquest like housing. Madam Minister, what are you waiting for? What is the battalion of engineers for if not to build homes?” asked the president of his official. “Make it act. Nothing, we come out of Camacol and Camacol and Camacol [the private Colombian Chamber of Construction]… asking for subsidies,” he criticized. Then he released his striking expression. He said that people do not buy homes because interest rates are too high. “Foolish is the one who buys a house today.”
The Head of State took the opportunity to blame the Bank of the Republic for the rise in interest rates. He said the central bank is at fault, not his government. “Houses are not being sold, and the subsidy stays in the banks, making profit for the banks, because the interest rate is very high, and the house is paid over 10 or 15 years. If you set a high interest rate, you are killing the homeowner,” he said.
For these remarks, President Petro was criticized, among others, by Sandra Forero, Councilwoman of Bogotá. She argued that the deterioration of housing purchases is the fault of the Petro government. “It is your fault. Yours for making mortgage credit more expensive with poor fiscal management. Yours because the minimum wage is going to increase inflation, and that makes the Bank of the Republic raise rates.”
“That is the constitutional duty of the Bank of the Republic,” Forero continued on the social network X. “It is yours [the fault] because you weakened the ‘Mi Casa Ya’ program and removed housing subsidies from families. Subsidies are for families, not for developers.”