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Mortgage loans: the surprising data that predicts continued rise in property prices - La Nacion Propiedades
Source:
March 21, 2025
According to data from the first months of 2025, mortgage financing continues to show good numbers.
By Candela Contreras
Credits: 2024 ended with more than 11,000 mortgage loans granted, and January and February marked the start of the year in which the positive trend is consolidated.Uladzimir Zuyeu - Shutterstock
Mortgage loans revolutionized the real estate market . After 24 banks launched their lines for home purchases, renovations, remodeling, and expansions, lending activity soared, marking a shift in the trend and breaking away from the summer seasonality, a time of year when purchase and sale transactions tend to slow down.
According to the latest report from the Notaries Association of the City of Buenos Aires , in January, one in four properties was acquired with a mortgage : 26% of the 3,645 transactions carried out. This percentage represents a significant increase compared to December , when mortgages were involved in less than 15% of transactions. Furthermore, year-on-year, mortgage transactions increased by 1,269.5% compared to January 2024.
The resurgence of mortgage lending in the second half of 2024 had already been notable, with more than 11,000 loans granted and an average loan amount of US$75,000 , according to a report by the Tejido Urbano Foundation. In macroeconomic terms, the total volume of loans granted represented 0.2% of GDP.
However, the true impact of the credit reactivation was seen in the first two months of 2025 , when around 5,000 mortgage loans were granted nationwide . January and February tend to be months in which transactions decline, and although this decrease was seen in the number of transactions, this was not the case in the case of mortgage purchases. "These data show the positive evolution of this type of credit and the strong demand for them," highlighted Fernando Álvarez de Celis, executive director of the Tejido Urbano Foundation, which tracks developments across the country.
In terms of financing volume nationwide, $186 million in mortgage loans were issued to individuals in January , while the figure rose to $204 million nationwide in February . This sustained growth reflects market confidence and the need for financing for home purchases. This follows the $184 million and $187 million loans issued in November and December, respectively . Thus, the average from October to February is $202 million.
Likewise, it's worth clarifying that " those who come with a credit project aren't going to stop because of the holidays . It's true that in the first few months of the year, there's a seasonality in the number of purchase and sale transactions," says Federico González Rouco, an economist specializing in housing. This data was reflected in the deeds, but it's not the same as the number of credit transactions .
In January, mortgage loans for individuals totaled $186 million, while in February the figure rose to $204 million.Maxie Amena - Archive
It should be noted that there are several factors why there has not yet been a major impact on growth : one is that since November of last year, 12 banks decided to raise their loan rates , increasing the average annual percentage rate from 5.5% to 7.4%. This has led to higher installments and requires a higher income to apply for a loan . However, one of the main reasons is that there is still no secondary mortgage market to help fund banks, and if this were to happen, it would increase the banks' supply.
Specialists agree that for a truly effective reactivation of mortgage lending in Argentina , it is necessary to develop a secondary mortgage market and ease financial restrictions . Without these tools, access to long-term financing will continue to be a challenge for thousands of families, "in a scenario where the State is drastically reducing its involvement in housing construction and the housing crisis is deepening among sectors such as tenants and occupants of informal housing," according to Tejido Urbano.
This means that banks , when granting mortgage loans for 20 or 30 years, need significant liquidity and funding, which they often do not have .
To achieve this, secondary markets are created: banks sell mortgages (which they previously granted to individuals) to long-term investors —such as retirement funds or pension plans—who buy the loans from the banks. The banks then create a trust with these loans, convert them into financial assets, and inject them into the capital market to generate profit. This process is known as "mortgage securitization," which provides greater liquidity to banks, since instead of waiting 20 or 30 years for repayment of the loan, they receive it quickly from these funds, thus gaining greater capacity to lend money and continue issuing mortgage loans.
“ The level of activity in January and February was very good compared to other years . In our case, we've had over 80% year-over-year growth,” says Mateo García, commercial director of the Residential Sector at Toribio Achával, adding that mortgage lending has been performing at a similar pace over the last four to five months . “The big issue is that all these deeds being issued now are for transactions that were executed 45 to 65 days ago or more,” he explains.
Therefore, for García, the great challenge facing banks today is to optimize mortgage loan structures to streamline processes , but to do so, "they need to become more polished, especially in the time from loan approval to appraisal and the collection of all the documentation."
The great challenge that banks face today is to be able to optimize mortgage loan structures to speed up the timesGBJSTOCK - Shutterstock
Both financial institutions and potential borrowers were already familiar with how the UVA system works, which accelerated the implementation process . "This allowed for a faster and more efficient deployment of credit lines once the conditions were met," they state in the report .
Despite this knowledge, the start of 2024 under the new government was slow . For the first six months, mortgage activity was virtually nonexistent. The first UVA credit lines were only launched in April , and applications began to trickle in gradually .
This initial delay was related to macroeconomic factors, such as exchange rate instability and doubts about the sustainability of the scheme. However, as support policies were consolidated and access conditions became clearer, "confidence began to grow."
And it was in the second half of the year that the change in pace became significant : since last July, growth in mortgage lending has been sustained, with a slight slowdown in November . This momentum was supported by competitive initial rates, bank incentives, and improved borrower income.
" The recovery of mortgage lending is possible , but it depends on economic stability and sustained policies that promote access to housing," the foundation asserts, adding that the challenge for 2025 will be to consolidate this growth and prevent further financial adjustments from halting the dream of owning a home for thousands of Argentinians.
www.buysellba.com
Source:
March 21, 2025
According to data from the first months of 2025, mortgage financing continues to show good numbers.
By Candela Contreras
Credits: 2024 ended with more than 11,000 mortgage loans granted, and January and February marked the start of the year in which the positive trend is consolidated.Uladzimir Zuyeu - Shutterstock
Mortgage loans revolutionized the real estate market . After 24 banks launched their lines for home purchases, renovations, remodeling, and expansions, lending activity soared, marking a shift in the trend and breaking away from the summer seasonality, a time of year when purchase and sale transactions tend to slow down.
According to the latest report from the Notaries Association of the City of Buenos Aires , in January, one in four properties was acquired with a mortgage : 26% of the 3,645 transactions carried out. This percentage represents a significant increase compared to December , when mortgages were involved in less than 15% of transactions. Furthermore, year-on-year, mortgage transactions increased by 1,269.5% compared to January 2024.
The resurgence of mortgage lending in the second half of 2024 had already been notable, with more than 11,000 loans granted and an average loan amount of US$75,000 , according to a report by the Tejido Urbano Foundation. In macroeconomic terms, the total volume of loans granted represented 0.2% of GDP.
However, the true impact of the credit reactivation was seen in the first two months of 2025 , when around 5,000 mortgage loans were granted nationwide . January and February tend to be months in which transactions decline, and although this decrease was seen in the number of transactions, this was not the case in the case of mortgage purchases. "These data show the positive evolution of this type of credit and the strong demand for them," highlighted Fernando Álvarez de Celis, executive director of the Tejido Urbano Foundation, which tracks developments across the country.
In terms of financing volume nationwide, $186 million in mortgage loans were issued to individuals in January , while the figure rose to $204 million nationwide in February . This sustained growth reflects market confidence and the need for financing for home purchases. This follows the $184 million and $187 million loans issued in November and December, respectively . Thus, the average from October to February is $202 million.
Likewise, it's worth clarifying that " those who come with a credit project aren't going to stop because of the holidays . It's true that in the first few months of the year, there's a seasonality in the number of purchase and sale transactions," says Federico González Rouco, an economist specializing in housing. This data was reflected in the deeds, but it's not the same as the number of credit transactions .
In January, mortgage loans for individuals totaled $186 million, while in February the figure rose to $204 million.Maxie Amena - Archive
Mortgage lending is growing, but still faces challenges
"Despite this stability in the loans granted, we are experiencing a slower supply than when the UVA lines were launched ," the economist adds.It should be noted that there are several factors why there has not yet been a major impact on growth : one is that since November of last year, 12 banks decided to raise their loan rates , increasing the average annual percentage rate from 5.5% to 7.4%. This has led to higher installments and requires a higher income to apply for a loan . However, one of the main reasons is that there is still no secondary mortgage market to help fund banks, and if this were to happen, it would increase the banks' supply.
Specialists agree that for a truly effective reactivation of mortgage lending in Argentina , it is necessary to develop a secondary mortgage market and ease financial restrictions . Without these tools, access to long-term financing will continue to be a challenge for thousands of families, "in a scenario where the State is drastically reducing its involvement in housing construction and the housing crisis is deepening among sectors such as tenants and occupants of informal housing," according to Tejido Urbano.
This means that banks , when granting mortgage loans for 20 or 30 years, need significant liquidity and funding, which they often do not have .
To achieve this, secondary markets are created: banks sell mortgages (which they previously granted to individuals) to long-term investors —such as retirement funds or pension plans—who buy the loans from the banks. The banks then create a trust with these loans, convert them into financial assets, and inject them into the capital market to generate profit. This process is known as "mortgage securitization," which provides greater liquidity to banks, since instead of waiting 20 or 30 years for repayment of the loan, they receive it quickly from these funds, thus gaining greater capacity to lend money and continue issuing mortgage loans.
“ The level of activity in January and February was very good compared to other years . In our case, we've had over 80% year-over-year growth,” says Mateo García, commercial director of the Residential Sector at Toribio Achával, adding that mortgage lending has been performing at a similar pace over the last four to five months . “The big issue is that all these deeds being issued now are for transactions that were executed 45 to 65 days ago or more,” he explains.
Therefore, for García, the great challenge facing banks today is to optimize mortgage loan structures to streamline processes , but to do so, "they need to become more polished, especially in the time from loan approval to appraisal and the collection of all the documentation."
The great challenge that banks face today is to be able to optimize mortgage loan structures to speed up the timesGBJSTOCK - Shutterstock
A progressive reactivation
UVA loans were first launched in 2016 during Mauricio Macri's administration, a type of mortgage loan that adjusts its value based on inflation. Now, unlike that period, which lasted until 2019, there was no significant learning curve required .Both financial institutions and potential borrowers were already familiar with how the UVA system works, which accelerated the implementation process . "This allowed for a faster and more efficient deployment of credit lines once the conditions were met," they state in the report .
Despite this knowledge, the start of 2024 under the new government was slow . For the first six months, mortgage activity was virtually nonexistent. The first UVA credit lines were only launched in April , and applications began to trickle in gradually .
This initial delay was related to macroeconomic factors, such as exchange rate instability and doubts about the sustainability of the scheme. However, as support policies were consolidated and access conditions became clearer, "confidence began to grow."
And it was in the second half of the year that the change in pace became significant : since last July, growth in mortgage lending has been sustained, with a slight slowdown in November . This momentum was supported by competitive initial rates, bank incentives, and improved borrower income.
" The recovery of mortgage lending is possible , but it depends on economic stability and sustained policies that promote access to housing," the foundation asserts, adding that the challenge for 2025 will be to consolidate this growth and prevent further financial adjustments from halting the dream of owning a home for thousands of Argentinians.
www.buysellba.com
