The return of loans is a positive sign. Not only does it encourage buying and selling, but it can also boost construction and has an impact on rents.
Although mortgage loans can be very advantageous in facilitating access to housing, it is crucial to carefully examine their impact on the dynamics of the real estate market.
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He real-estate market can be significantly affected by the mortgage loans. These can increase demand for property by giving a greater number of people access to housing and at the same time generating an increase in house prices, especially in areas where few options are available, for example in the northern range of the Autonomous City of Buenos Aires, which is where there is the greatest demand. It is a very positive sign, since it puts the market in greater movement, as seen in recent months, where all actors end up benefiting.
On the other hand, due to the availability of mortgage financing for buyers, they can also stimulate the construction of new homes or make renovations. This can increase construction activity, which can benefit the local economy. Regardless of the fact that then there are other macro issues such as currency issues, inflation and its impact on material prices, etc.
However, it is important to note that an increase in mortgage lending can also lead to an increase in household indebtedness, which can result in increased risk for both banks and homeowners in the event of changes in the economic conditions, such as higher interest rates or a decrease in property values.
Besides, have the potential to affect the rental market. Demand for rentals could decrease if more people choose to buy rather than rent due to the affordability of mortgage loans, which would affect rental prices and the availability of rental units in certain areas.
If there are credits for developers, they may also affect construction activity. Developers may be motivated to build more properties to meet housing demand if there is greater availability of financing, which could lead to an increase in economic activity in the construction sector.
Finally, it is important to consider the risks associated with an increase in mortgage lending. A market with a large amount of mortgage debt may be exposed to changes in the economy, such as increases in interest rates or decreases in property prices, which could create problems for homeowners and financial risks for banks.
Although mortgage loans can be very advantageous in facilitating access to housing, it is crucial to carefully examine their impact on the dynamics of the real estate market. and consider how these trends may affect (mostly positively) various facets of the real estate sector and the economy in general.
Founder of Arnaude Brokers
Source: Ambito
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