Maybe be I will be able to buy that Apartment in Lima soon (:http://gestion.pe/2012/08/20/inmobiliar ... ia-2010371
We are halfway to a housing bubble?
Monday, August 20, 2012
The gap between the growing trend of housing prices, mortgage loans and Peruvian GDP may indicate that the housing sector is entering an explosive path. "The probability is 50%," says Carlos Casas, a former deputy economy minister.
Homes recommends the banking system to keep control of their security. (Video: Paulo Rivas Peña)
Maria Claudia de la Barra[email protected]
In recent years, it has seen a significant increase in the price of real estate, and its rate of expansion in Maharashtra, for example, has remained above 20% per year since the second quarter of 2011, according to the Central Reserve Bank (BCR).
While this behavior responds to increased economic growth, and therefore revenue, the trend is "worrying", as compared with that presented the Gross Domestic Product (GDP) in recent years, says Carlos Casas, a former deputy economy minister.
In that sense, Holiday explains that since 2006 the upward trend of housing prices has been approximately 4% per quarter, the mortgage loans of about 5%, while GDP has done only by 1.5 %. It also indicates that the prices of construction materials have increased at a rate less than 1%.
"These gaps are of concern because they may indicate people are buying houses for speculation, given the lack of profitability of other financial instruments, such as stock," the well head of the Economics Department of the University of the Pacific.
"The possibility that people are speculating in the Construction is 50%, so that would be the same chance that we are entering a bubble," he estimated.
Ensures that although this behavior may also be responding to an unmet demand in the property sector, the likelihood that housing demand is only for purposes of profit, can "lead" a big problem that must be controlled.
"The problem is that we could be at the start of a bubble which we control and give the necessary signals to the market to avoid a problem that occurs after all have to regret," says Casas.
Pricing? Still low?
According to Casas, one of the 'arguments' Construction sector to explain the behavior of prices accelerated upward is that Peru would still have room to grow, because their prices are still below those in the region. However, believes that this should be corrected according to each country's respective incomes.
"The house prices in Peru are 20% below Bogota and Santiago, for example. However, it should be noted that these countries have a higher per capita income. That is why we must be careful because the measure is not clearly shown, "reveals Homes.
Regarding the growth of mortgage loans, which would triple the trend quarterly GDP (5% versus 1.5%), Casas recommends the banking system to keep control of their security and improve their reporting mechanisms for how far should grow in response to a real unmet.
"While the share of mortgage loans in the portfolio of banks (14%) is still low compared with other countries, the speed at which it has been growing concern. It must have adequate control over the granting of these credits and analyze, if indeed, your destiny is to meet housing needs, "