Residential property sales in Chile are likely to soar in the coming year.
There will be an increase of 18% in 2012 sales over 2011 according to the Chilean Chamber of Construction, selling around 69,000 homes. The robust economy, which is expected to grow at 5.7 percent in 2012, has boosted residential demand. This is the second-highest growth rate in Latin America after Peru, and the sixth-highest worldwide. Chile's jobless rate has dipped to 6.2%, the lowest level in four years, according to official figures. companies
Another element influencing demand is the wider availability of finance. According to the Chilean Superintendence of Banks and Financial Institutions, the volume of real estate loans expanded in November, and the Central Bank noted that lending criteria had loosened. Short-term mortgage rates fell by over 1% between October and November, hitting a new low of 4.9%.
The Cajas de Compensación, which provide loans to people who have historically had difficulty obtaining conventional bank financing, are becoming a stronger player in Chile's residential real estate finance markets. When comparing October 2011 to October 2012, the volume of credit extended by these institutions increased by about 78%.
Investors have benefited from more flexible loan terms provided by real estate development corporations, such as the ability to pay down payments in installments. Rental space is more readily available for holiday home owners when they are not utilizing it. Third-party management of residential properties to improve investment returns will likely become more popular as investors try to surpass the lackluster local stock market returns and developers try to sell down product volumes in the face of rising competition.
Demand from Chile's new economic classes, which are becoming an increasingly important portion of the country's residential real estate market, has increased as a result of government-sponsored housing subsidies Between 2011 and 2012, the Chilean government distributed about 73,000 housing subsidies.
Demand and sales volumes have increased, which has resulted in higher residential prices. In October, the Chilean Construction Chamber reports that the Housing Price Index climbed from 130.7 in September to 125.8 in October of 2011 to 132.2.. HPI-H climbed by 5.1% on a quarterly basis, whereas HPI-A increased by 11.2% on a quarterly basis The price increases for 2, 3, and 4 bedroom apartments were 9.2%, 15.5%, and 11.8%, respectively.
This indicates that developers are beginning to take a more cautious medium-term strategy due to the vast quantity of residential space expected to come online and the Central Bank's growing anxiety about this sector, notwithstanding strong sales and rising house prices. According to the Chilean National Statistics Institute, total allowed building space decreased by 20.7% in November 2012 as compared to November 2011.