According to a survey carried out by Scope with the Federal Council of Real Estate Associations of Argentina and the Real Estate Collegethe incidence of mortgage credit in sales increased fivefold in CABA, while in the rest of the country it was verified that from September to October, the incidence doubled.
In the City of Buenos Aires, The increase in the participation of this financing line in the month of April barely represented 3.1% of the total purchase and sale operations. While in October, not only sales increased but also the use of credit, which now represented 15% of total operations.
For example, in CABA the participation of UVA credit was recorded in this way month by month in operations and percentages, since April:
- April: 114 (3.1% of the total)
- May: 141 (3.1% of the total)
- June: 115 writings (2.7% of the total)
- July: 225 (4.5% of the total)
- August: 416 (7.8% of the total)
- September: 705 (13.7% of the total)
- October: 944 (15.8% of the total)
Virginia Manzotti, president of COFECI (Federal Council of Real Estate Associations of Argentina), for its part, provided information on what is happening in Mendoza and Córdoba, two of the main cities of the country: “in Mendoza, considering sales from the end of September to the end of November, about “190 operations, 7.8%, were with mortgage loans. In the previous months, it did not exceed 2.5%.”
And he added: “the statistics of total real estate sales (first and second hand) from the CEI (Center for real estate statistics of the CPI Córdoba Professional Association) show a growth of 76.2% year-on-year, also motivated by growth in mortgage credit.”
Banks granted 1,370 UVA mortgage loans to individuals in the month of Septemberaccording to the latest report published by ADEBA (Association of Argentine Banks), last week. This figure represents an increase of 78% compared to the previous month and 188% compared to the monthly average of 2023.
“The reactivation of mortgage credit was viable thanks to a series of factors: low inflation, macroeconomic order, robust position of the banks and the failure of legislative projects that sought to modify or ignore the terms and conditions of previously granted mortgage contracts. “, they expressed from ADEBA.
For the mortgage market, although money laundering had a considerable role in the increase in operations, they began to notice that the trend surpassed this event and that queries increased from people who saw the possibility of purchase of well homes at rates What the banks are offering. It is worth remembering that there are already 23 banks that offer lines of credit in UVAs and the rates range between 3% and 9.5% with benefits for those who have a salary account.
Real estate market and banks: expectations for the coming months
From ADEBA they hope that mortgage credit will continue to consolidate as a financing line in the coming months and highlighted the latest measures of the Government. “The subdivision of mortgages is notable; this provision is a step in the right direction by facilitating the use of rights over properties under construction as collateral for loans,” they said from ADEBA.
Just a week ago, the Government authorized divisible mortgages, that allow a developer to build a residential building to finance the project by requesting a mortgage loan from the bank. The objective is twofold: to boost the construction sector that has been relegated due to the absence of public works and to reduce the housing deficit in Argentina.
A representative of one of the Argentine banks that currently grants the most mortgage loans, confirmed to Scope that this measure can especially boost housing construction which today are not as in demand as, for example, 3 and 4 room apartments. From the sector they emphasize that the numbers that are being seen in October and November inclusive, demonstrate strong growth in the real estate market, highest since 2017, but there is still a long way to go to see a boom of that magnitude.
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“The mortgage loan market in Argentina is still very small compared to other countries in the region, but we are seeing signs of growth that we cannot ignore. There is a growth in credit operations starting in August (exponential growth in the last 2 months). It is encouraging to see how this trend is beginning to take hold. We are far from a robust market, but recent advances indicate that we are on the right track,” said Sebastián Sosa, president of RE/MAX Argentina in dialogue with this medium.
“We are excited because we are having now six thousand monthly writings, and a thousand are with credit. People right now are looking for their own, small lot, even if they have to renovate it and don’t have the money to do it today, but it is a bet on the future. In this context, the PH is one of the options,” revealed Marta Liotto, representative of the Real Estate Association.
“The third component that is being looked at the most are studio apartments, for the youngest and for an investor as well. Mortgage loans are being used not only for housing but also as a haven of value,” he added.
Strong demand for credit: banks in trouble?
Federico González Rouco, economist and specialist in the real estate market, told this medium that banks could face a liquidity problem due to the strong demand for loans and that the acceptance of portfolios is already slowing down.
“There were several modifications in the conditions of the banks. Most of the modifications were in the sense of restrict credits a little. In other words, either the rate goes up or the term goes down. That is in almost all cases, except for one bank that expanded the financing limit, the rest of the modifications were raising the rate or shortening the term. Especially by raising rates. So I think now we’re starting to see the stress on the system from so much demand. What the banks say is that the demand was phenomenal and The system does not have the liquidity to accommodate all of that.. But I think there is still room to continue growing, especially because we come from nothing. So as long as there is some movement in the credit market, that will be a movement and growth.”
In relation to what Rouco said, last week from ABA (Association of Argentine Banks) they stated that the banks would issue Negotiable Obligations (ON) to finance mortgage loans, but that would only happen in 2025. In this sense, the analyst assured that today, the current financial market is a “limiting” credit. “The ONs of banks have been, at most, for 2 years. It is difficult to match something of 25 or 30 years with something of 2. A part is going to match the growth of the system itself, but until the secondary market is developed It’s going to be difficult,” he concluded.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
