This document aims to quantify differences in housing rental prices across the main metropolitan areas of Colombia during the 2008–2024 period. To this end, spatial price indices of the Fisher type are constructed, corresponding to the geometric mean of Laspeyres and Paasche indices. In addition, persistence indicators of these indices are developed to analyze the stability of rental cost hierarchies across metropolitan areas. The data used come from the Gran Encuesta Integrada de Hogares, specifically from the housing characteristics module. The analysis focuses on 18 metropolitan areas selected from an initial set of 23, prioritizing consistency and data availability over the 2008–2024 period. The price indices are constructed based on a common basket of housing attributes, using Bogotá as the reference city. To ensure more robust comparisons, the Propensity Score Matching method is applied, thus summarizing the differences into a single relative price index. A marked heterogeneity is observed in rental prices. Bogotá occupies the leading position in most of the years analyzed; however, there are notable exceptions: Cartagena ranks first in 2008, 2009, and 2018, while Medellín takes the lead in 2024. Moreover, a high degree of persistence is observed in the price hierarchies, supported by strong correlations of the price indices and the rank positions of the cities over time.
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Approach
This study examines rental costs across various Colombian cities to understand their contribution to the cost of living and their recent evolution. A comparative index is constructed to measure price differences between cities, adjusting for housing quality and characteristics so that comparisons are made between equivalent housing units. The estimation relies on microdata from the Gran Encuesta Integrada de Hogares (GEIH, General Integrated Household Survey) and statistical procedures that ensure results consistent with international literature. The analysis covers the period from 2008 to 2024, allowing for the identification of short-term patterns and deeper structural changes in the urban rental market.
Contribution
This study offers a twofold contribution. First, it proposes a measurement strategy that corrects quality differences across cities, providing a fairer comparison of rental prices and reducing common biases in analyses based solely on observed averages. Second, it presents an empirical overview of the evolution of rental prices across the country, highlighting which cities gain or lose relative positions and how stable the price hierarchy remains over time. This approach enables the interpretation of observed changes considering local demand and supply conditions and the macroeconomic context, providing useful evidence for urban and social policy discussions.
Renting has gained undeniable prominence in household tenure structures and household economies: the proportion of families living in rental housing has steadily increased and, in major urban centers, it now exceeds homeownership.
Findings
The findings reveal a heterogeneous and evolving landscape in Colombia’s rental markets. There has been a sustained improvement in the supply and quality of rental housing, with greater access to services, better finishes, and an increase in average size. At the aggregate level, the rental burden on income increased until the pandemic, experienced a sharp rise, and then stabilized above pre-pandemic levels, with marked differences across cities. Moreover, renting has gained undeniable prominence in household tenure structures and household economies: the proportion of families living in rental housing has steadily increased and, in major urban centers, now exceeds homeownership.
In 2008, Cartagena and Bogotá ranked among the most expensive cities for renting; by 2024, leadership shifted, with Medellín topping the ranking, surpassing traditionally leading cities. Barranquilla and Santa Marta also rose in the rankings, while several intermediate capitals became relatively more affordable. Although the price hierarchy tends to remain stable over short horizons, the full period reveals significant reordering. Overall, the results show that urban rental markets in Colombia exhibit differentiated dynamics and that leadership in rental costs has undergone notable changes in recent years.