Wednesday, July 23, 2014

Home sales fell 6.1% and announce the end of the housing boom

The housing boom is over. This was stated yesterday by the research manager of the Chilean Chamber of Construction (CCHC), Javier Hurtado, reporting a 6.1% drop in home sales noted in the Greater Santiago during the second quarter compared with the same period last year.

This is the largest decline for that period since 2010, when a drop of 26.2% was reported.

"There is talk of boom when sales depart upward from historical trends. In 2012 occurred the phenomenon. Now we are not moving away upward trend, but the figures show that we are under her. No longer boom, it's over that, "Hurtado said.

The drop in home sales occurred in houses and apartments, low of 12.8% and 3.2%, respectively.

Hurtado said that "during the period from April to June 2014 home sales fell below its long term trend, having been aligned with this in the immediately preceding quarter."

In the first six months of this year were sold in Greater Santiago 17,494 households, implying a decline of 0.6%. Of the total, 12,764 were for departments and units to 4,730 homes.

According CChC Santiago Centro lost share in the sales department, going from 32% in the second quarter of 2013 to 19%; still continues to lead this segment. Commune Central Station, whose participation in sales departments increased from 8% in the same quarter last year to 12% in 2014 appears on the opposite sidewalk.

Regarding the demand for apartments, it continues to focus on properties whose value is between 1000 and 3000 UF UF, reaching 71% of sales during the second quarter, while those exceeding 4,000 UF concentrate 17%. In the case of households, those with a value of less than 1,000 UF exhibited low participation due to the shortage of units in this segment.

Regarding the mode of sale, green homes in this quarter maintained a high turnout. Regarding departments, reached 83% of the units sold, while in homes accounted for 86%.

As for the size of homes, over 50% of departments had sold less than 50 square meters, while in the home segment, 53% of the demand concentrated on units up to 90 square meters.

According to the Real Housing Price Index in April-June the price of apartments in Greater Santiago recorded an annual rise of 13.7% and homes rose 7.9%.

Hurtado added that "the supply of homes decreased 12% in 12 months, due to the supply of apartments fell 14% and home, 2%."

Today 12.1 months needed to deplete the stock available: 13.5 months for departments and 8.5 months for homes.

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