From the initial $14.05 with which the Purchasing Value Unit (UVA) was born in March 2016, for the first time in its short history it is close to $100, which implies a growth of just over 600%.
Beyond this rise, Llach, former vice president of the Central Bank in the Macri years, defended the model in an interview with NA, specified that it was the moment so far this century where more credits were granted, pointed to the salary level and assured that those who took a UVA credit “did a good deal.”
– How do you think UVA worked?
– It was the moment in which more mortgage loans were given in the century. 99% of the people were able to pay their installments and it was precisely because the UVA is the most stable item in a consumer’s basket. All other goods rise like inflation, just like the UVA, but with jumps depending on the seasonality of the product. Of course, since the Argentine economy did not do well these years, the purchasing power of people in general fell measured against any product and it became more difficult to pay the UVA fee., but as it became more difficult to pay for anything else. Those who got into debt at UVA did a good deal.
– What do you think about it being close to 100 pesos?
– It is easier to make the account. When the UVA was born, it was worth about a dollar, which was a single dollar, about 16 pesos per dollar and just over 14 pesos per UVA. Now a real dollar is worth 220 and the UVA is worth 100. This means that those who took a credit in UVA to buy a house were paying installments and what the house is worth today, beyond the fact that the properties have fallen, continues to exceed the UVA quota that measured in dollars fell much more than the good.
So the people who bought with UVA had a capital gain. They are richer than they would be if they had not taken this credit to buy the house. We all want to have some official help and the one who got into debt at UVA says, “the quota measured in pesos went up, so compensate me.” In fact, already in the Macri government there were some compensations. The concrete thing is that measured objectively and compared to those who rent, those who took a loan did a good deal.
– With the experience of what happened, what would you correct the UVA credit product?
– UVA credits continue to exist, it is not that this Government changed UVA loans, the reason why there is less credit today is that it changed the proportion between the value of the property and salaries in such a great way that they are not enough for give people an amount of credit large enough to purchase a property. On the other hand, the product from the beginning has a trigger clause that is activated if the evolution of the UVA exceeds that of wages by 10% or more and allows the term to be extended.
I think that to improve it, the banks themselves could be induced to offer them insurance. That is to say, that the fee is capped with UVA plus a percentage. I think it is important that it is linked to the price index because someone has to put up the money they lend and it is not the banks, it is the depositors. This insurance could be more automatic and debtors would feel more confident when taking out the loan, and it would not be so expensive for banks to provide this insurance. It would be a trigger that the debtor does not assume, it is a cost for the one who grants the loan, that is insurable and it is not so expensive.
– Why are there no credits today?
– Because of the relationship between the good and the salary and also because if we force the loans to be in pesos at a fixed rate, that is synonymous with the fact that there is no mortgage credit in Argentina. That is why there was a record when the lender was allowed to know that if there is a spike in inflation, the loan they granted would not be liquefied.
– What do you say to the UVA mortgage group?
– That they do the math well and ask themselves frankly, would they be better off not having asked for the loan than how they are now that the fee goes up as the rent also goes up for the tenant?
I do not see that there is any argument why, as a society, we have to subsidize the indebted UVA and we do not have to subsidize all the tenants, who are many more and who also raise their rent. When I find an argument to subsidize landlords but not renters, that’s where they can convince me.
Source From: Ambito
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