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Mortgage loans are not yet felt: When could they impact the market? - El Cronista
Source:
August 1st, 2024
Despite the expectations they generated in the market, very few UVA loan transactions are still being closed. What needs to happen for them to gain momentum?
By Ricardo Quesada
When banks began announcing in April that they were opening new lines of UVA mortgage loans , the real estate sector was filled with expectations . The financing was going to give more impetus to a market that was in full recovery from the worst years on record.
However, more than three months later, nothing seems to have changed . In the latest report on deeds carried out by the College of Notaries of the City of Buenos Aires, only 115 of the 4,232 transactions closed in June were made with a mortgage involved. And, although in the year-on-year comparison, purchase-sale operations continue to grow, the increase is not what many in the sector expected.
"Customers tell us that banks are experiencing long delays. And although the entities have many requests, we must not forget that mortgage credit disappeared so long ago that banks have to train their employees and that will take time ," explains Gabriel Brodsky, chairman of Grupo Predial.
One of the country's main private banks said that although many inquiries are received, most of them come to nothing . In addition, they explained, the increase in financial dollars in recent months discouraged a large number of candidates .
The other problem, added another entity, is that in order to grant mortgage loans, people who are qualified are needed, which has been lost in recent years . "You have to do the prequalification and then you need a lot of documents from the person requesting the loan and from the property. Once everything is presented, it takes three weeks , but there is always some paperwork missing," they explained.
Today, real estate agents say that there are many inquiries from people interested in buying on credit . However, little of this interest is translated into properties sold. The feeling, they explain in the sector, is that some are just beginning to test the market, but the intention is to move forward later .
Waiting
"We see a lot of people looking for information to make a decision in the short term . I think that with inflation stabilizing and an improvement in purchasing power, credits will take off," added Brodsky, who predicted that it will take at least a year for credits to start having a strong impact on the market .The current reality is very different from that experienced in 2017, when UVA credits first appeared. At that time, there was explosive growth in demand and property prices rose rapidly . Thus, when the market slowed down in the second half of 2018, properties were left with very high valuations.
"The market was stagnant and we had a hard time making the owners understand that they had to lower prices if they wanted to sell ," added Miguel Di Maggio, director of the Depa real estate agency.
Risky bet
The specialist adds that, although inflation has begun to show a downward trend since its peak in January, it is still around 4% per month . At this rate, it can be risky to take out a loan in which the capital owed is updated practically at the same speed as the price index."UVA loans are a very good tool, but they need lower inflation . In addition, the interest rates offered, which are generally around 4% the first year and rise to 8% from the second, are very high," added Di Maggio.
In the same vein, Miguel Altgelt, of Altgelt Negocios Inmobiliarios, said that it will take time for mortgage loans to give the market a boost . In order to see a real change, he added, we must wait for inflation to drop.
The dollar factor
" As long as it remains above 40% or 50% annually, it will be very complicated . And to that we must add another factor that is no less important: we must achieve the stabilization of the exchange rate," he said.With properties in dollars and loans in pesos, the delay in granting loans plays against you . If there were to be a devaluation between the deposit on a property and the deed, the transaction could fail.
"If the country continues like this and inflation continues to fall, there will be more requests for loans. But it will take time ," concluded Altgelt.
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