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Mortgage loans: how much does it cost to “make the jump” to a better property or one with a more comfortable environment? - La Nacion Propiedades
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www.lanacion.com.ar
November 14, 2024
Most mortgage loan applications arise from the sale of a previous property
By Candle Contreras
Mortgage loans surprised the market after five years of almost non-existence Daniel Basualdo
“ 2024 is a year of transition ,” real estate market specialists agree. After three years of falling property prices, in 2023 the square meter stabilized, but it was this year that prices began to grow : 12.6% in September compared to the same month of the previous year, for the set of sales of used studio- to two-bedroom apartments in the city of Buenos Aires, according to data provided by the latest survey conducted by Reporte Inmobiliario.
This increase is driven in part by the return of mortgage credit , by 22 banks, which generated a dynamism in the market. “In a country where 80% of the population cannot buy a home because their salary does not allow it, the offer of credit is essential to connect income with access to housing ,” said Gonzalo de la Serna, CEO of Consultatio, at Data Day 2 organized by Reporte Inmobiliario.
Data from the College of Notaries of the City of Buenos Aires indicate that loans represented 14% of the deeds executed in the month of September (705 with mortgages out of a total of 5,157 operations), so it can be said that the sector is in a moment of recovery of mortgage credit in which many owners can make a "leap" towards larger or better located homes.
“Currently, 20% of families in Buenos Aires can access a property through credit . Although it seems a low percentage, it represents an improvement compared to previous years and shows a positive trend,” said Maximiliano Coll, deputy general manager of Banco Ciudad.
Most banks finance up to 75% of the total value of the property. FreePik
A key fact regarding the percentage that can access a mortgage loan is that most banking entities finance up to 75% of the total value of the property in pesos , provided that the initial fee does not exceed 25% of the applicant's income. Therefore, people need the remaining 25% of the value of the property to pay in cash and in dollars as a down payment to be able to enter. This point is one of the most difficult to meet when wanting to buy a property.
This is why banking entities have indicated that most loans are requested by selling a previous property , in order to be able to pay the down payment, and thus move to a better or larger one.
“ With the required income levels, it is logical that those who will be eligible for the first round of loans will be those who already have significant savings or those who are making the leap to a better property ,” said Federico González Rouco, an economist specializing in housing.
For those looking for a three-bedroom apartment , the costs increase considerably:
According to analysts, for mortgage credit to work, exchange rate and macroeconomic stability should be maintained. GBJSTOCK - Shutterstock
Furthermore, the time taken by banks from the time a loan is requested to the time it is granted tends to be between 30 and 40 days. This requires a stable context so that property values do not fluctuate abruptly . Lucas Salvatore, director of Idero, explained that “current rates are reasonable, but the real problem is the low purchasing power of salaries in relation to the value of properties.”
“ The real estate market has been supported by investors . Now, with the reactivation of mortgage credit, it represents a transcendental opportunity for more people to access their own home,” says Horacio Parga, from the developer Edisur. However, the path to achieving inclusive access to credit remains complex . The combination of macroeconomic stability and an improvement in purchasing power is essential for mortgage credit to be a tool for transformation in access to housing.
“All this stability or convergence of the different dollars is leading to better performance with clients, closing the deal,” explained José Rozados, founder of Reporte Inmobiliario. He added that what must be taken into account is that “ the credit is adjustable by UVA but is granted in pesos which, in turn, are exchanged for dollars at the MEP rate (because properties in Argentina are sold in dollars) at the time of the deed. So, the fact that the dollars begin to converge at a certain level where there is not so much distortion between them also helps to get you out of trouble.”
www.buysellba.com
Source:
Créditos hipotecarios: cuánto cuesta “dar el salto” a una propiedad mejor o con un ambiente más
La mayoría de las solicitudes de préstamos hipotecarios nacen a partir de la venta de una propiedad previa
www.lanacion.com.ar
November 14, 2024
Most mortgage loan applications arise from the sale of a previous property
By Candle Contreras
Mortgage loans surprised the market after five years of almost non-existence Daniel Basualdo
“ 2024 is a year of transition ,” real estate market specialists agree. After three years of falling property prices, in 2023 the square meter stabilized, but it was this year that prices began to grow : 12.6% in September compared to the same month of the previous year, for the set of sales of used studio- to two-bedroom apartments in the city of Buenos Aires, according to data provided by the latest survey conducted by Reporte Inmobiliario.
This increase is driven in part by the return of mortgage credit , by 22 banks, which generated a dynamism in the market. “In a country where 80% of the population cannot buy a home because their salary does not allow it, the offer of credit is essential to connect income with access to housing ,” said Gonzalo de la Serna, CEO of Consultatio, at Data Day 2 organized by Reporte Inmobiliario.
Data from the College of Notaries of the City of Buenos Aires indicate that loans represented 14% of the deeds executed in the month of September (705 with mortgages out of a total of 5,157 operations), so it can be said that the sector is in a moment of recovery of mortgage credit in which many owners can make a "leap" towards larger or better located homes.
“Currently, 20% of families in Buenos Aires can access a property through credit . Although it seems a low percentage, it represents an improvement compared to previous years and shows a positive trend,” said Maximiliano Coll, deputy general manager of Banco Ciudad.
Most banks finance up to 75% of the total value of the property. FreePik
A key fact regarding the percentage that can access a mortgage loan is that most banking entities finance up to 75% of the total value of the property in pesos , provided that the initial fee does not exceed 25% of the applicant's income. Therefore, people need the remaining 25% of the value of the property to pay in cash and in dollars as a down payment to be able to enter. This point is one of the most difficult to meet when wanting to buy a property.
This is why banking entities have indicated that most loans are requested by selling a previous property , in order to be able to pay the down payment, and thus move to a better or larger one.
“ With the required income levels, it is logical that those who will be eligible for the first round of loans will be those who already have significant savings or those who are making the leap to a better property ,” said Federico González Rouco, an economist specializing in housing.
The costs of “jumping” to a larger home
Data from Reporte Inmobiliario reveals the average costs to make these changes in the used apartment market in the city of Buenos Aires:- Moving from a studio apartment to a one-bedroom apartment requires an investment of around US$11,000
- Changing from a one-bedroom apartment to a two-bedroom apartment involves an additional US$30,000.
- For those who want to go from a studio to a two-bedroom apartment , the jump represents a cost of US$41,000
For those looking for a three-bedroom apartment , the costs increase considerably:
- From a two-bedroom apartment , the additional cost is about US$40,000.
- From a one-bedroom apartment , the jump requires US$70,000
- To go from a studio apartment to a three-bedroom apartment , the additional investment amounts to US$81,000.
According to analysts, for mortgage credit to work, exchange rate and macroeconomic stability should be maintained. GBJSTOCK - Shutterstock
The key challenge for mortgage lending to work
Specialists agree that mortgage credit could be consolidated if exchange rate and macroeconomic stability are maintained . “We have seen how with each jump in the dollar, operations slow down ,” they point out from Banco Ciudad. In the last month, the relative calm in the exchange market increased credit inquiries, since stability provides security for both entities and applicants . “If we maintain these conditions necessary for stability in the economy, there would have to be a significant jump in demand,” they add.Furthermore, the time taken by banks from the time a loan is requested to the time it is granted tends to be between 30 and 40 days. This requires a stable context so that property values do not fluctuate abruptly . Lucas Salvatore, director of Idero, explained that “current rates are reasonable, but the real problem is the low purchasing power of salaries in relation to the value of properties.”
“ The real estate market has been supported by investors . Now, with the reactivation of mortgage credit, it represents a transcendental opportunity for more people to access their own home,” says Horacio Parga, from the developer Edisur. However, the path to achieving inclusive access to credit remains complex . The combination of macroeconomic stability and an improvement in purchasing power is essential for mortgage credit to be a tool for transformation in access to housing.
“All this stability or convergence of the different dollars is leading to better performance with clients, closing the deal,” explained José Rozados, founder of Reporte Inmobiliario. He added that what must be taken into account is that “ the credit is adjustable by UVA but is granted in pesos which, in turn, are exchanged for dollars at the MEP rate (because properties in Argentina are sold in dollars) at the time of the deed. So, the fact that the dollars begin to converge at a certain level where there is not so much distortion between them also helps to get you out of trouble.”
www.buysellba.com
