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Mortgage credit and real estate boom: there have already been more than 250,000 inquiries and there are banks that grant 10 loans per day - Infobae
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www.infobae.com
November 03, 2024
After more than 5 years of crisis, the sector is recovering, driven by dozens of banking lines, which in September provided more than USD 100 million in mortgage loans, a record figure since 2018. The most in-demand properties are those intended for first homes. Credit for home renovations is also on the move.
By Jose Luis Cieri
It is becoming a common sight in banks. Month after month, the disbursements that allow families and individuals to access their own home are increasing (Illustrative Image Infobae)
The Argentine mortgage market is showing clear signs of recovery, a development that, although incipient, is seen as the first step towards the revitalization of a sector hit by more than 5 years of crisis.
With 22 banks currently ( Banco Hipotecario was the first to reintroduce them at the end of April ) offering loans adjusted by Purchasing Power Units (UVA), last September a loan volume exceeding USD 100 million was achieved, a level that had not been recorded since August 2018 ($125,704 million were granted and the graph below, based on data from the BCRA, shows the rapid evolution of these lines).
Federico González Rouco , an economist at the Empiria consultancy specializing in the real estate market, told Infobae that the figure is very significant, although still insufficient in relation to the country's structural deficit in terms of housing.
"We are on the right track. In September, more than USD 100 million in UVA loans were granted, something that has not happened for six years," he said.
According to data from the Notary Associations of CABA and the province of Buenos Aires, in September some 1,400 purchase transactions were carried out through mortgage loans , a figure 20 times higher than at the beginning of the year. This is equivalent to an increase of 1,900% in just nine months, although from very low levels.
"We are witnessing the first start, at a completely embryonic stage. One of the first signs of normality in an economy is the sustainability of mortgage credit; it reflects an economy on the path to stabilization and a private sector that is betting on the long term," González Rouco added.
The specialist is optimistic about the continuity of the phenomenon. “If economic activity strengthens, salaries improve and volatility is reduced, in two or three years we could compare ourselves with other Latin American countries. A mortgage loan is one of the longest-term decisions that a person makes, and there are few that extend to 25 years, both economically and personally,” he stressed.
Source: With data from the Central Bank of the Argentine Republic
By the way, mortgage lending was never massive in Argentina. There were periods of greater volume, such as in the late 1940s with Juan Domingo Perón in government, or in the 1990s until the beginning of the 2000s, but it never exceeded 5% of the economy, a level that in other countries is considered basic.
The current dynamic is very interesting. Maximiliano Coll , deputy general manager of Personal Banking at Banco Ciudad, confirmed to Infobae that about 10 loans are being granted daily. “We are very pleased because we have noticed that more people are stopping renting and becoming owners, both in CABA and in different parts where the bank is present, such as Córdoba or Salta; 90% is used to buy their first home, and the rest is used by people who request financing to refurbish or expand their home.”
Since the initial announcement by the banks, a large number of enquiries ( more than 250,000 ) and simulations have been registered to access plans of up to $250,000,000 to purchase ( see graph below ). Some lines allow higher or lower amounts, always with UVA-adjusted installments. Most entities finance up to 75% of the value of the property, although Banco Macro has the Joven line, which offers up to 90% financing on the value of the home.
According to Real Estate Report, in the Almagro neighborhood, the average price per square meter is USD 1,845, which sets the value of a typical 43-square-meter unit at USD 79,335; to access a loan that covers this amount, the bank finances $76,756,613, while the buyer must have a down payment of 19,834 dollars.
The initial installment of this loan amounts to $450,372, and a monthly income of $1,801,488 is required to meet the bank's requirements.
In another example, in the Flores neighborhood, the average price per square meter is USD 1,643, placing the value of a 43 m2 apartment at USD 70,649; for this type of unit, the bank finances $68,352,908, with an initial payment of 401,063 pesos.
The monthly income required to access the loan is $1,604,252, and USD 17,662 is required as an advance payment.
Javier Varani , manager of the Institutional Relations Area of Banco Hipotecario, stated that “76% of the loans granted are for the purchase of housing, 13% for construction, 6% for expansion and the remaining 5% for completion of work.”
Source: Empiria Consulting
In addition, the average amount requested is $80 million, with an average income of $3.3 million among those who access the credit. Half of the applications were submitted by two holders, adding income to facilitate access to the loan. As for the terms, 70% of the credits were requested for 30 years.
For its part, Banco Nación continues to record strong demand for mortgage loans, with 50,000 applications received and 9,000 loans already approved.
“Most applicants opt for the line based on the Salary Variation Coefficient (CVS), which allows any difference in the update of the installment to be transferred to the end of the loan if income grows below inflation,” said Gastón Álvarez , general manager of Banco Nación.
In recent months, banks have confirmed a steady increase in mortgage loan enquiries and applications, driven by customers who compare the cost of a monthly payment with that of rent. This trend reflects a growing preference for financing options that allow access to property.
Miguel Ángel Malatesta , CEO of the Petersen Group banks, said: “As leaders of regional banking in Santa Fe, Entre Ríos, San Juan and Santa Cruz, we continue to be close to our communities, creating and offering value propositions so that our clients can carry out their projects together with the local bank. The regional focus allows the entity to design tools adapted to the specific needs of each community.”
At Banco Macro, inquiries and disbursements for home purchases are recorded both in CABA and in the interior, since 70% of its branches are outside Buenos Aires and the province of Buenos Aires.
Applying for a mortgage loan is a common need due to the lack of own funds to acquire one's own home (Photo: Freepik)
Francisco Muro , Macro's Distribution and Sales Manager, said that disbursements have increased by 10% to 15% each month since last May. “Currently, we carry out around 1,120 monthly transactions and, to date, more than $9.8 billion have been allocated in loans focused exclusively on sales, driven mostly by young people.”
The average first-year installment for every $10 million loan is $80,000 for clients who receive their salary from the bank, Muro said.
Bancor, the provincial bank of Córdoba, has established itself as a key player in the reactivation of mortgage lending. González Rouco highlighted its role in this upturn: “Bancor has tripled its market share since 2019, going from 4% to 13% of the national mortgage portfolio, competing with larger entities.”
In cities such as Rosario, Villa Ballester (GBA north), Escobar, La Plata, Mendoza capital, San Miguel de Tucumán, Posadas and Neuquén, mortgage loans also show progress, especially for the purchase and sale of two- and three-room apartments and three-room houses, with average prices of USD 80,000; in the interior and GBA, the values are lower compared to CABA; however, the income of applicants is also lower, which makes it difficult to access financing for owning a home.
Although much of the transaction is done online, several banks are overwhelmed by the high demand, which contrasts with the paralysis that affected the sector in recent years.
This was detailed on Friday in La Nación+ by journalist Pablo Rossi . “I went to Córdoba because my son Ignacio had to sign a mortgage loan for his first home. We went as guarantors. It is not yet for the general public because everyone's income has to be added together. I thought we were going to an office, with a notary and the developer, but I found a room with 85 families, all at the same time, signing the loans. I asked and they confirmed: it happens in many banks. They told me that the branches are having physical problems, space problems, because of the people who go, because of the demand. Afterwards I spoke with the president of Banco Córdoba who assured that they are granting 15 mortgage loans per day,” Rossi explained.
"I spoke to several people, all of them families who are betting that the country will give them a 20-year deadline to pay for their own home," he added.
Oscar Puebla , architect and real estate expert, said that this demand is largely driven by young people looking for their first property, many of whom have family financial support.
Young people are driving home buying and selling operations with bank leverage now (Illustrative Image Infobae)
“Today, buyers are mostly young people without their own home, accompanied by their parents, who surely laundered some dollars to help them. They are the end users we have been waiting for, the opportunity to reactivate a sector that had been dormant,” he explained.
Sergio Santamarina shared the experience of his 33-year-old son, who recently acquired a studio apartment in Villa Santa Rita. “It was a huge joy. He stopped paying rent and now pays around $330,000 a month, similar to the cost of renting an average studio apartment in the city. Everything was resolved in less than 60 days,” he commented.
The transaction was completed with a local real estate agency for USD 49,000, with expenses of $90,000 per month. “50% of the value of the property was allocated. That is vital, and if inflation remains like this, it will be key for the future and surely more people will be encouraged to obtain a mortgage loan,” added Santamarina.
Those who take out loans to refurbish or expand their homes are also gaining support (Illustrative image Infobae)
He stressed that at least five years of continuous mortgage lending policies are needed to begin to reduce the housing deficit. “Long-term loans are a first step to expand the housing stock and reduce the deficit,” added Álvarez de Celis.
Looking ahead, experts agree that the key will be to maintain a consistent mortgage lending policy and to implement new initiatives to facilitate access to financing, especially for lower-income sectors.
In several countries, governments subsidize part of the loans for young people, low-income families and other vulnerable groups, something that, according to González Rouco, would be an important step if access to credit is to be expanded in Argentina.
As the market continues to adapt, the banking sector faces the challenge of meeting growing demand, which highlights the need for staff and resources to process requests.
“In the long term, this incipient recovery could pave the way for a more accessible and stable real estate market in the country, while end users, mostly young people looking for their first home, are positioned as the main protagonists of this new stage,” said Vanesa Ibarra , from Salguero Properties.
www.buysllba.com
Source:
Crédito hipotecario y boom inmobiliario: ya hubo más de 250.000 consultas y hay bancos que otorgan 10 préstamos por día
Luego de más de 5 años de crisis, el sector inmobiliario muestra signos de recuperación con 22 bancos ofreciendo créditos hipotecarios en UVA. En septiembre, se destinaron más de USD 100 millones en préstamos, cifra no vista desde 2018. Las propiedades más demandadas son aquellas destinadas a...
www.infobae.com
November 03, 2024
After more than 5 years of crisis, the sector is recovering, driven by dozens of banking lines, which in September provided more than USD 100 million in mortgage loans, a record figure since 2018. The most in-demand properties are those intended for first homes. Credit for home renovations is also on the move.
By Jose Luis Cieri
It is becoming a common sight in banks. Month after month, the disbursements that allow families and individuals to access their own home are increasing (Illustrative Image Infobae)
The Argentine mortgage market is showing clear signs of recovery, a development that, although incipient, is seen as the first step towards the revitalization of a sector hit by more than 5 years of crisis.
With 22 banks currently ( Banco Hipotecario was the first to reintroduce them at the end of April ) offering loans adjusted by Purchasing Power Units (UVA), last September a loan volume exceeding USD 100 million was achieved, a level that had not been recorded since August 2018 ($125,704 million were granted and the graph below, based on data from the BCRA, shows the rapid evolution of these lines).
Federico González Rouco , an economist at the Empiria consultancy specializing in the real estate market, told Infobae that the figure is very significant, although still insufficient in relation to the country's structural deficit in terms of housing.
"We are on the right track. In September, more than USD 100 million in UVA loans were granted, something that has not happened for six years," he said.
According to data from the Notary Associations of CABA and the province of Buenos Aires, in September some 1,400 purchase transactions were carried out through mortgage loans , a figure 20 times higher than at the beginning of the year. This is equivalent to an increase of 1,900% in just nine months, although from very low levels.
"We are witnessing the first start, at a completely embryonic stage. One of the first signs of normality in an economy is the sustainability of mortgage credit; it reflects an economy on the path to stabilization and a private sector that is betting on the long term," González Rouco added.
The specialist is optimistic about the continuity of the phenomenon. “If economic activity strengthens, salaries improve and volatility is reduced, in two or three years we could compare ourselves with other Latin American countries. A mortgage loan is one of the longest-term decisions that a person makes, and there are few that extend to 25 years, both economically and personally,” he stressed.
Source: With data from the Central Bank of the Argentine Republic
By the way, mortgage lending was never massive in Argentina. There were periods of greater volume, such as in the late 1940s with Juan Domingo Perón in government, or in the 1990s until the beginning of the 2000s, but it never exceeded 5% of the economy, a level that in other countries is considered basic.
Demand
Demand is mainly focused on first-time home properties and home renovation or expansion projects.The current dynamic is very interesting. Maximiliano Coll , deputy general manager of Personal Banking at Banco Ciudad, confirmed to Infobae that about 10 loans are being granted daily. “We are very pleased because we have noticed that more people are stopping renting and becoming owners, both in CABA and in different parts where the bank is present, such as Córdoba or Salta; 90% is used to buy their first home, and the rest is used by people who request financing to refurbish or expand their home.”
Since the initial announcement by the banks, a large number of enquiries ( more than 250,000 ) and simulations have been registered to access plans of up to $250,000,000 to purchase ( see graph below ). Some lines allow higher or lower amounts, always with UVA-adjusted installments. Most entities finance up to 75% of the value of the property, although Banco Macro has the Joven line, which offers up to 90% financing on the value of the home.
According to Real Estate Report, in the Almagro neighborhood, the average price per square meter is USD 1,845, which sets the value of a typical 43-square-meter unit at USD 79,335; to access a loan that covers this amount, the bank finances $76,756,613, while the buyer must have a down payment of 19,834 dollars.
The initial installment of this loan amounts to $450,372, and a monthly income of $1,801,488 is required to meet the bank's requirements.
In another example, in the Flores neighborhood, the average price per square meter is USD 1,643, placing the value of a 43 m2 apartment at USD 70,649; for this type of unit, the bank finances $68,352,908, with an initial payment of 401,063 pesos.
The monthly income required to access the loan is $1,604,252, and USD 17,662 is required as an advance payment.
By the banks
The demand for mortgage loans continues to grow, reflected in an increase in simulations and pre-qualifications. According to data from Banco Hipotecario, more than 130,000 people performed credit simulations on its website, while around 15,000 pre-qualified for a loan, both virtually and in branches. Of these pre-qualifications, 5% have already completed their application, managing loans totaling more than $50 billion; it is worth noting that 70% of the procedures were done digitally, consolidating the preference for the online channel.Javier Varani , manager of the Institutional Relations Area of Banco Hipotecario, stated that “76% of the loans granted are for the purchase of housing, 13% for construction, 6% for expansion and the remaining 5% for completion of work.”
Source: Empiria Consulting
In addition, the average amount requested is $80 million, with an average income of $3.3 million among those who access the credit. Half of the applications were submitted by two holders, adding income to facilitate access to the loan. As for the terms, 70% of the credits were requested for 30 years.
For its part, Banco Nación continues to record strong demand for mortgage loans, with 50,000 applications received and 9,000 loans already approved.
“Most applicants opt for the line based on the Salary Variation Coefficient (CVS), which allows any difference in the update of the installment to be transferred to the end of the loan if income grows below inflation,” said Gastón Álvarez , general manager of Banco Nación.
In recent months, banks have confirmed a steady increase in mortgage loan enquiries and applications, driven by customers who compare the cost of a monthly payment with that of rent. This trend reflects a growing preference for financing options that allow access to property.
Miguel Ángel Malatesta , CEO of the Petersen Group banks, said: “As leaders of regional banking in Santa Fe, Entre Ríos, San Juan and Santa Cruz, we continue to be close to our communities, creating and offering value propositions so that our clients can carry out their projects together with the local bank. The regional focus allows the entity to design tools adapted to the specific needs of each community.”
At Banco Macro, inquiries and disbursements for home purchases are recorded both in CABA and in the interior, since 70% of its branches are outside Buenos Aires and the province of Buenos Aires.
Applying for a mortgage loan is a common need due to the lack of own funds to acquire one's own home (Photo: Freepik)
Francisco Muro , Macro's Distribution and Sales Manager, said that disbursements have increased by 10% to 15% each month since last May. “Currently, we carry out around 1,120 monthly transactions and, to date, more than $9.8 billion have been allocated in loans focused exclusively on sales, driven mostly by young people.”
The average first-year installment for every $10 million loan is $80,000 for clients who receive their salary from the bank, Muro said.
Recovery in figures
Several banks across the country relaunched their UVA mortgage credit lines, a modality that offers financing at rates ranging from 3.5% to 9% plus UVA.Bancor, the provincial bank of Córdoba, has established itself as a key player in the reactivation of mortgage lending. González Rouco highlighted its role in this upturn: “Bancor has tripled its market share since 2019, going from 4% to 13% of the national mortgage portfolio, competing with larger entities.”
In cities such as Rosario, Villa Ballester (GBA north), Escobar, La Plata, Mendoza capital, San Miguel de Tucumán, Posadas and Neuquén, mortgage loans also show progress, especially for the purchase and sale of two- and three-room apartments and three-room houses, with average prices of USD 80,000; in the interior and GBA, the values are lower compared to CABA; however, the income of applicants is also lower, which makes it difficult to access financing for owning a home.
In the foreground
In recent days, real estate agents in CABA have reported that bank branches are filled with clients waiting to obtain UVA loans, a scene that was unexpected months ago. President Javier Milei himself points out that there are things that are no longer discussed; “in Argentina we are talking about mortgage loans,” he said at the last Real Estate Expo last August.Although much of the transaction is done online, several banks are overwhelmed by the high demand, which contrasts with the paralysis that affected the sector in recent years.
This was detailed on Friday in La Nación+ by journalist Pablo Rossi . “I went to Córdoba because my son Ignacio had to sign a mortgage loan for his first home. We went as guarantors. It is not yet for the general public because everyone's income has to be added together. I thought we were going to an office, with a notary and the developer, but I found a room with 85 families, all at the same time, signing the loans. I asked and they confirmed: it happens in many banks. They told me that the branches are having physical problems, space problems, because of the people who go, because of the demand. Afterwards I spoke with the president of Banco Córdoba who assured that they are granting 15 mortgage loans per day,” Rossi explained.
"I spoke to several people, all of them families who are betting that the country will give them a 20-year deadline to pay for their own home," he added.
Oscar Puebla , architect and real estate expert, said that this demand is largely driven by young people looking for their first property, many of whom have family financial support.
Young people are driving home buying and selling operations with bank leverage now (Illustrative Image Infobae)
“Today, buyers are mostly young people without their own home, accompanied by their parents, who surely laundered some dollars to help them. They are the end users we have been waiting for, the opportunity to reactivate a sector that had been dormant,” he explained.
Sergio Santamarina shared the experience of his 33-year-old son, who recently acquired a studio apartment in Villa Santa Rita. “It was a huge joy. He stopped paying rent and now pays around $330,000 a month, similar to the cost of renting an average studio apartment in the city. Everything was resolved in less than 60 days,” he commented.
The transaction was completed with a local real estate agency for USD 49,000, with expenses of $90,000 per month. “50% of the value of the property was allocated. That is vital, and if inflation remains like this, it will be key for the future and surely more people will be encouraged to obtain a mortgage loan,” added Santamarina.
Challenge and future
Fernando Álvarez de Celis , director of the Tejido Urbano Foundation, warned that accessing these loans remains complex. “A USD 40,000 loan, which only covers part of an average home in CABA, requires a minimum income of $1,000,000 and installments of $240,000. In addition, some banks limit their loans to certain provinces,” he said.
Those who take out loans to refurbish or expand their homes are also gaining support (Illustrative image Infobae)
He stressed that at least five years of continuous mortgage lending policies are needed to begin to reduce the housing deficit. “Long-term loans are a first step to expand the housing stock and reduce the deficit,” added Álvarez de Celis.
Looking ahead, experts agree that the key will be to maintain a consistent mortgage lending policy and to implement new initiatives to facilitate access to financing, especially for lower-income sectors.
In several countries, governments subsidize part of the loans for young people, low-income families and other vulnerable groups, something that, according to González Rouco, would be an important step if access to credit is to be expanded in Argentina.
As the market continues to adapt, the banking sector faces the challenge of meeting growing demand, which highlights the need for staff and resources to process requests.
“In the long term, this incipient recovery could pave the way for a more accessible and stable real estate market in the country, while end users, mostly young people looking for their first home, are positioned as the main protagonists of this new stage,” said Vanesa Ibarra , from Salguero Properties.
www.buysllba.com
