1. HOUSING MARKET SEGMENTATION AND REAL ESTATE BUBBLE THREAT, BOGOTA 2006-2015 Óscar A. Alfonso R. Construcción de Estado, Territorio y Paz Laura Amézquita

2. Preview 1.Objective 2.Context 3.Theoretical Framework 4.Methodology 5.Results Final considerations

3. 1. Objective This research emphasizes the fact of the quality of density is the principal difference in housing production because in high segments of income has low brute densities, with excellent public service dotation, also privates and collectives, proximity to good public spaces. Hypotheses The density is quite differentiated between segments while the quality of density weakens.

4. 2. Context: A capital city of Colombia During the last decade, housing formal production at Bogota is done under a particular socio and economical context: i.Persistence of bad income distribution, bad quality of labor market and persistence of informality. ii.Increase of single household, feature of actual demographic transition in Colombia. iii.Change in public housing policy to demand subsidy for low income households to subsidies in interest rate to mortgage loan for middle segments of income. iv.Ambiguity in urban planning policy in relation to real estate market and differentiation of population densities. v.Persistence of legal barriers to planning with neighbor municipalities the housing production.

5. 3- Theoretical Framework AN INSTITUTIONAL PERSPECTIVE OF HOUSING MARKET SEGMENTATION IN A LATIN AMERICAN METROPOLI Real estate supply is restrained by capital mobility under financiarisation and new modes to financier projects (David, 2013). The heterogeneity in agents’ behaviors is a start point to explain a segmented housing order ( Abramo, 2011). Causes of segmentation must be searched in nature of residential goods which differences it from other goods by its spatial immobility, its durability and its heterogeneity (Tu, 2003).

6. Institutions and segmentation Housing policies play a main role in segmentation. Change in the role of the State as promotor, builder and financer to passive agent with constraint functions in financial leveraging to demand. Urban planning regulation subject to plans and expressed in build permission to privates. The crucial dimension of real estate bubble: segmentation Two stages: 1.Inflation in assets prices due to financial leveraging for real estate market and financialisation to buyer with mortgage loan. 2.Deflation accompanied by increase in financial obligations impossible to be paid Any bubble has a financial component

7. 4. Methodology

8. HOUSING SEGMENTS CONFIGURATION IN METROPOLITAN AREA OF BOGOTA Historic data of housing segmentation (Alfonso, 2012b). Features of segmentation in new housing market (Alfonso, 2012a). Observatory: Statistics updated on the supply of new housing in the classifieds of the newspaper, in magazines and websites dedicated to real estate. Official cartographical base date to Unity Planning Zone and Neighborhood scale from City Hall. Density Quality Index (Alfonso, 2016). 3.050 observations of new housing offers, 2.493 of them (81,7%) in Bogota and 557 (18,3%) in metropolitan municipalities.

9. Source: Done by the authors based on statistics of Rubiano (2007), La Galería Inmobiliaria (2007), www.fincaraiz.com.co; y, www.metrocuadrado.com.www.fincaraiz.com.co www.metrocuadrado.com 5. Results Max segment

10. Presale Source: Done by the authors based on statistics of Rubiano (2007), La Galería Inmobiliaria (2007), www.fincaraiz.com.co; y, www.metrocuadrado.com.www.fincaraiz.com.co www.metrocuadrado.com

11. Price of square meter by segment (new housing Bogota and Metropolitan Area 2005-2015 (Prices of 2015). Source: Authors from Rubiano (2007), La Galer í a Inmobiliaria (2007), www.fincaraiz.com.co; y, www.metrocuadrado.com.www.fincaraiz.com.cowww.metrocuadrado.com

12. Panel date model for New Housing Prices in Metropolitan Area of Bogota

13. AR1 panel data model with fixed effects

14. Final considerations There is a segregation scheme that indicates to supply agents where produce and for whom. There is some social-economics feature that shows it is necessary produce housing in some zone where real estate agents never do. Housing production for high income households contrast with tight production, sometime null, for low income households. For these reason housing prices reveal lacking and surplus in differentiated way, stopping access to housing to poor people. Theoretical framework advising about the need of new approach, which go after denunciation and demonization of profit real estate, and propose an interpretation of formal housing markets, and social possibilities to overcome the perennial segregation in Latin America metropolis.

15. THANKS !! Óscar A. Alfonso R. Laura Amézquita oscar.alfonso@uexternado.edu.co laura.amezquita@unine.ch