The housing market in Colombia was especially strong in 2010 which is partly due to the burgeoning economy and partly because of the peaceful transition to a new president. It's expected that house prices will continue to increase this year and Colombia's investment rating was upgraded in March to investment-grade.
The average house price rose by 9.25% in 2010 with the average price of a new apartment increasing by 9.57%, and the price of new homes increased by 5.69%. Three cities in particular showed strong price increases last year, which were Bucaramanga with increases of 15.2% year-on-year, Bogota with increases of 10.5% and Barranquilla with increases of up to 8.6%.
Colombia has a housing deficit of around 2.4 million homes with 185,000 new homes being needed annually. There are signs that this demand is partially being met as housing approvals reached 153,903 last year, with this high level being partly accounted for by the reduction in construction costs.
The Colombian economy grew by 4.3% last year up from 1.5% in 2009. The growth during the last quarter of 2010 was especially strong, and as a result of this there was a 3.2% increase in the consumer price index during the first quarter of this year, but this is still within the central banks 2% to 4% target.
The country gained a new president in August 2010, Juan Manuel Santos, who succeeded Alvaro Uribe. Santos was formerly the Minister of defence and his main priorities include improving relations with Ecuador and Venezuela and reducing the high levels of unemployment.
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