House prices

In recent months, the country’s real estate market has not been performing as one might expect, in the sense that house prices are not receding as sales decline.

Housing demand will be restricted by the increase in interest rates and new housing production will remain at similar levels to 2019. Unlike in other countries, there are no price imbalances and the moderation in growth will come mainly from used housing.

Today, as recession looms and inflation rears its head, we are likely to see a return to a somewhat gloomy housing market, even if house prices do not actually fall. But how hard will the adjustment be this time around?

Real estate market is starting to feel the economic slowdown and the rise in interest rates. This context justifies a contraction in sales in 2023, despite which the level will remain high. Housing starts will stagnate in 2023 and the nominal price will grow by around 2%.

Home sales grew in September, but at a slower rate. Credit approvals for home purchases nevertheless rose more in October than in previous months. Prices continue to trend upwards, but less sharply in Q3 2018. While building authorizations fell in September, the industry did continue creating jobs.

Edward Glaeser, one of the best economists to study the growth of cities, has called them "humanity's best invention". However, many of us who live in large urban areas are also aware of the negative externalities generated within them. This suggests the possibility that there is an optimal city size, where benefits and det…