Colombia's residential property market is at all-time highs.

Colombia's real estate industry is booming, and it's having a big impact on secondary housing markets. Following the rise in new house costs, used home (existing home sales) prices in Colombia have continued to rise, reaching a new high. According to a research by Portafolio, used home prices have increased by 74% since the end of 2004.

Given the present rate of the country's economic growth and the wide availability of financing, housing demand in Colombia is expected to stay robust. Colombia's economy is expected to develop at a good rate of 4.5 percent in 2012, and at a good rate of 4% in 2013, especially provided the Central Bank does not hike the reference interest rate. If the nearly 50-year battle between the Colombian government and the FARC rebels comes to an end, Colombia might see a large increase in foreign investment, adding to housing demand. As a new round of peace talks gets underway, the rebels agreed to a two-month cease-fire. property

The increase in used house prices has coincided with a decrease in the issuing of residential construction permits, which should limit supply and keep prices rising. According to a report published by Colombia's National Administrative Department of Statistics, the amount of residential space permitted in September 2012 was down 1.1 percent from September 2011. However, the drop was substantially bigger in the first nine months of the year, at 24.1 percent. Over the course of a year, the drop was 19.1 percent. One of the main causes for the reduction has been the shrinking amount of space available for new home building in major urban centers.

The development approval data shows a dramatic drop in approvals for public interest housing, which has been a major goal of the Santos administration. Construction approvals for public interest housing decreased by 8% from 357,313 square meters in September 2011 to 328,551 square meters this September. The drop in development approvals for public interest dwelling space was more extreme in 2012 and the previous 12 months, at 31.9 percent and 30.1 percent, respectively.

As one might think, the rising cost of used homes is encouraging people to rent rather than buy, which should raise rental rates. Because of the scale of the rental market in Colombia, this is a particularly pressing issue. 

According to a United Nations research, Colombia has a larger rate of renters than 16 other Latin American countries. According to a CENAC research, an even higher number of people in Bogota, 41%, rent rather than own their homes. Given current new and used house pricing trends, the rental sector is anticipated to expand.