Is the supply of mortgage loans from banks slowing down?

The Real estate companies are worried because they believe that banks are delaying the procedures to approve mortgages. The overwhelming momentum that the first financings with real guarantee had a few months ago, now it would be calming down because the entities are short of funding.

A procedure that a few months ago took 25 days would now be resolved in 45, according to what they say. Due to this, The College of Real Estate Brokers of the City of Buenos Aires has already requested meetings to the directors of the Association of Banks of Argentina (ABA) and the Association of Argentine Banks (ADEBA), the two main entities that represent the financial sector.

And what they suspect is that The demand for mortgage loans has already reached a limit at which entities can “bank them on their own back.” From now on they will need to anchor themselves in the market to be able to continue supplying orders or look for some other solution. For now, it I would be trying to complicate the offer a little.

“There was an increase in interest rates, but it was minimal,” explained Martha Liotto, former president of the Unique College of Real Estate Brokers of the City of Buenos Aires (CUCICBA). Liotto, owner of one of the most important real estate companies in the city, pointed out that “the banks are delaying the processing, but that is something internal.”

According to what he said, when the mortgage offers started at the beginning of this year, the first to ask were the bank employees and the banks’ own clients and at that time they came out quickly within 20 days. The city market of Buenos Aires reached a level of about 1,000 monthly mortgages and growing. But now the resolution of a folder It is taking about 40 days.

This is due, according to speculation among real estate companies, because the banks are already exhausting their own funding to supply demand. It is time when they have to go to the market to “transfer” the risk.

Securitizing is the solution

In ABA, according to Claudio Cesario, its president, stated a few days ago, the possibility of securitizing the portfolios to obtain new funds is expected next year. and thus continue the wheel. But beyond that, they consider that care must be taken, since the country’s macroeconomic situation is not resolved yet. Any problems that may exist in the future, such as a rise in inflation, can make bonds that have mortgages as underlying assets risky.

The other way in which banks are trying to limit supply has been by raising interest rates, although this has been rather marginal. Rates at some banks rose between half a point and 3 and a half points. The other options have been to reduce the financing term or modify the percentage of the home value to be financed.

According to data from The First Capital Groupbased on information from the Central Bank, the lines of mortgage loansincluding those adjustable by inflation/UVA, during November they had an increase of 21.9% with respect to the stock of $1.2 billion from the previous month.

Mortgage loans then They accumulate $1.5 trillion in the first 11 months of the year with a nominal growth of 151.7%, below inflation. The First points out that the mortgage line “managed to place more in November than during the immediately previous month, thus demonstrating that it has not yet found its placement ceiling and generating significant expectations among the demanding public.”

How much does a home cost in salaries

The calculation may be quite simple but it explains the difficulties that the middle sectors of society may have in accessing a mortgage loan. The value of an apartment or property is located at 100 average salaries in the registered economy.

That is, a person should earn the equivalent of two average salaries or something more to be able to aspire to buy a home in the term of about 8 years. Presented in this way, the housing problem in Argentina and in most countries is not related to both with financing through mortgage loans, but with the gap between income and housing prices which has been expanding in recent decades.

Today the resource for people to replace the payment of a rent with a mortgage loan installment is the exit of vast sectors of the middle class, in many cases monotributistas, to get out of that situation.

The price in dollars

Liotto points out that until last year an owner who He set the value of his apartment at US$100,000 and received offers for US$70,000. That scenario is changing. Now the operation can be arranged for US$85,000.

Statistics from the College of Notaries of the City of Buenos Aires indicate that in October the average value of properties deeded during October was about US$104,000. The average price in dollars rose 19% compared to 2023. Almost 6,000 operations were recorded, which marks a market recovery in year-on-year terms of 16%.