The dream of own house has become an increasingly complex challenge in Chile. According to a recent report from the Chilean Chamber of Construction (CChC), an average family in the country needs to save 11.4 years of their entire income to purchase an average-priced home. This data reflects a significant increase compared to 2019, when the time required was 7.6 years, marking an increase of 3.8 years in just four years.
What is the Housing Access Index (PIR)?
The calculation of saving It is based on the Housing Access Index (PIR), an international metric that measures the relationship between housing prices and average household income. According to this indicator, a home is considered “affordable” if it requires less than three years of family income and “unaffordable” if it requires more than five years. With 11.4 years of required savings, Chile is placed in the category of countries with “unaffordable” housing.
International comparison: How is Chile compared to other countries?
At a global level, Chile is among the countries with the greatest difficulty in accessing dwelling. Only New Zealand, with a PIR of 11.6 years, exceeds the Chilean figures. In comparison, Canada registers a PIR of 9.1 years and Australia of 8.4 years, although they are also considered countries with difficult-to-acquire homes.
What factors explain this crisis?
According to Nicolás León, manager of Studies and Public Policies of the CChC, several factors contribute to this problem in achieving own house:
- Limited supply: The increase in land prices, restrictions on building in height and the increase in the cost of materials and labor after the pandemic have increased housing costs.
- Growing demand: The increase in the number of households due to migration and changes in family composition has increased pressure on the market.
- Restricted financing: Difficulties in accessing mortgage loans and regulatory changes such as the application of VAT to homes in 2016 have worsened access.
Proposals to improve access to housing
To address this crisis of dwellingthe CChC has proposed several measures:
- Transitional subsidy for middle sectors: Facilitate the purchase of new homes through a mortgage financing line.
- Reducing construction costs: Implement compensatory mechanisms, such as the replacement of CEEC credits.
- Extension of mortgage guarantees: Extend the Fogaes until 2026 and increase the coverage of the mortgage footing from 10% to 15%.
- Update regulations: Eliminate obsolete laws, such as the Pipeline Law, and optimize urban indicators.
