Nowadays, the housing sector is not living its best moment. According to figures provided by BBVA Bancomer, during the last six months, the capitalization of companies in that field fell by 85%, most of them started a liability-restructuration process, and sales and operation decreased in more than 50%. Initial estimates even point to a 1% drop in Mexico\u2019s GDP in 2013 due to the sector\u2019s problems. In the face of structural changes occurring in the country, this crisis highlights several issues regarding the speculative dynamics of Mexican economics and its competitiveness level.
\nCertainly, several actions of the current administrations have allowed the bubble to burst: a delay in the federal government\u2019s programs, lag in the credit payment of INFONAVIT and FOVISSSTE and, above all, the emission, during last February, of the new guidelines of housing policy that established, among other things, prioritizing credits towards vertical houses in urban centers, leaving aside the financing of horizontal housing in the outskirts of cities, that is to say, where the main territorial reserve of real state companies lied (as well as part of its capital, which quickly lost its value). Likewise, it is worth noting the government\u2019s announcement regarding that it would not financially rescue affected companies. However, has the real state bubble\u2019s burst been a blessing in disguise given the fact that it wasn\u2019t allowed to grow towards more serious levels?
\nIn his State of the Union Address, President Pe\u00f1a highlighted \u2013 with all the political jargon \u2013 that \u201cthere are clear rules nowadays, houses will not be built away from work places nor will essentials services be lack\u201d. This was a direct criticism to the housing policies of PAN administrations, one of the party\u2019s highlights during the Presidential campaign to promote the \u201cachievements\u201d of their governments. What is true is that the 2007-2012 National Housing Program established goals in that period that led from a 4-million house deficit to a unit surplus, in other words, empty houses. Most of them were abandoned under the circumstances described by Pe\u00f1a. Politically, the Calder\u00f3n administration saw housing as a way to increase the number of votes and Presidential approval ratings. A \u201cnecessary\u201d policy was undertaken to an extreme growth rate that generated a supply unable to be sustained, at least under the horizontal expansion model being followed back then.
\nWhat factors influenced in the generation of the so-called housing bubble? Firstly, an accelerated growth of mortgage credits in PAN administrations, specially to reach social classes that lack their own houses: the average FOVISSSTE credits grew during the last two decades, while INFONAVIT increased by 203% in that same period. Secondly, credit expansion was accompanied by a surplus in the territorial reserves of companies due to the existence of a tax regime that allowed them to deduct taxes from land investments. The guideline change in 2013 made the territorial reserves for horizontal houses outside urban areas useless, in addition of creating a drop in the price per square meter in these areas, preventing its short-term sale. Beyond the credit growth (sustainable or not) the direct explanation of the sector crisis was due to a change in the rules of the game. Thirdly, the demand decrease in the face of the 2009 crisis led companies to focus their portfolios on construction and social interest houses, which were now subsidized. Concentration of that portfolio substantially increased the risk of that sector. In 2010 the risk intended to be minimized with new guidelines on quality, location and accounting forms in the housing sector, but the adjustment was late.
\nPerhaps it was essential to break the trend that the sector was experiencing before their effects were even more devastating, though it could have been in a less drastic way, with a transition program that would prevent the crisis that the sector is now facing. For example, the creation of different guidelines per geographical zones, particularly with a lesser asset of territorial reserve from housing companies that were in the stock exchange, as well as an easing of the uncertainty in the market with development plans in zones outside of urban areas where built houses are already present. In the end, there is no \u201cwould\u201d in real life. The fact is that the entire construction sector \u2013 essential to GDP growth \u2013 has been affected, another factor of economic deceleration that can be attributed to governmental decisions.<\/p>\n
CIDAC<\/p>\n","protected":false},"excerpt":{"rendered":"
Nowadays, the housing sector is not living its best moment. According to
\n figures provided by BBVA Bancomer, during the last six months, the
\ncapitalization of companies in that field fell by 85%, most of them
\nstarted a liability-restructuration process, and sales and operation
\ndecreased in more than 50%. Initial estimates even point to a 1% drop in
\n Mexico\u2019s GDP in 2013 due to the sector\u2019s problems.<\/p>\n","protected":false},"author":3,"featured_media":4656,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[30],"class_list":["post-3415","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-weekly-political-analysis","tag-political-analysis"],"_links":{"self":[{"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/posts\/3415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/comments?post=3415"}],"version-history":[{"count":2,"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/posts\/3415\/revisions"}],"predecessor-version":[{"id":4321,"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/posts\/3415\/revisions\/4321"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/media\/4656"}],"wp:attachment":[{"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/media?parent=3415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/categories?post=3415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cidacmx.org\/eng\/wp-json\/wp\/v2\/tags?post=3415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}