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Why divisible mortgages could become the new engine for the Argentine real estate market - Infobae
Source:
www.infobae.com
January 03, 2025
The housing development and construction sector has expectations regarding the DNU that promotes the purchase of units from the outset. Congress will have to deal with it when it resumes legislative activity, while, for now, only one bank has launched this proposal.
By Jose Luis Cieri
A construction site in the Núñez neighborhood. Divisible mortgages allow buyers to take on portions of debt in projects in the works
The recent Decree of Necessity and Urgency 1017/2024 introduced divisible mortgages (also called future or undivided mortgages) as an innovative tool that promises to transform the real estate sector in Argentina , especially with regard to construction projects in the pit and acquisition of properties without deeds.
This system launched by the Government (which must be reaffirmed by the National Congress when it resumes the legislative agenda in March) seeks to make credit more flexible and promote access to housing, and is already beginning to generate enthusiasm and expectations in different sectors of the market.
Pablo Pirovano , a mortgage law specialist and partner at Pasbba Abogados, highlighted to Infobae that “the possibility of dividing a mortgage originally constituted on a real estate development allows the credit and the mortgage guarantee to also be transferred to the respective purchasers.”
This means that each buyer can assume a proportional balance of debt corresponding to their unit, a modality that, according to Pirovano, “will increase the stock of available housing and strengthen price competitiveness.”
The lawyer emphasized that this model makes it easier for buyers to access financing without having to rely solely on their own savings, something essential in a country with mortgage credit difficulties. A few days ago, Banco Ciudad launched a UVA mortgage credit line to finance housing from scratch in CABA, with amounts of up to $350 million and terms of 10, 15 and 20 years.
The loans allow financing up to 75% of the value of the property and are intended for single, permanent housing in projects approved by the bank. They target small and medium-sized developments, with a majority of units up to 70 square meters, and offer preferential rates for central and southern areas of the city.
In this regard, the head of AS Real Estate, Alejandro Suárez , assured that this tool “will strengthen confidence”, while several projects located in CABA and Greater Buenos Aires report a significant increase in inquiries.
Among the main benefits of the system is the possibility of reducing the dependence on the initial investment of buyers and developers.
A favourable tax framework could boost the development of the sector and ensure its long-term sustainability.
Franco Robiglio , partner at Robiglio Abogados, explained that “the system requires that real estate projects meet certain requirements, such as a domain free of encumbrances and a precise description of the urban detail and the subdivision.”
The housing developers and builders maintain that this type of measure could generate greater clarity and develop a more stable regulatory framework for the sector. “The number, characteristics and destination of the future functional units or plots of land must be stated. The parties must also agree that once the division of the property is completed and ownership is transferred to each purchaser, the credit and mortgage guarantee can be divided for each unit, by the proportional balance,” added Robiglio.
Although it could initially be interpreted as unfavourable for the buyer, Pirovano defended this flexibility by arguing that “it will make transactions cheaper by leaving the decision to contract with developers who offer guarantees to the autonomy of the parties.”
This legislation could be complemented with new fiscal and financial incentives to ensure its positive impact. For example, the proposals include the creation of guarantee funds, tax reductions and measures by the Central Bank to facilitate more accessible credit.
Villa Devoto attracts attention with new projects underway
This advance is essential in a market where operations in the field and under construction often depend on trusts or sales contracts that lack registration support. “It will facilitate the negotiation and transferability of properties, ensuring a more agile process for buyers,” said Pirovano.
In Caballito , a neighborhood with high demand, the owner of Connection Negocios Inmobiliarios, Eduardo Pérez , said that this modality “stimulates sales in bulk.”
Projects currently in pre-construction, and other new buildings close to the traditional English Quarter , are already receiving an increase in enquiries.
In this context, Tomás Oubiña , from Tomás Oubiña Properties, considered that “the current moment represents a unique opportunity, since the values per square meter are below replacement costs.”
Pérez agrees with this vision and predicts that projects located in Caballito, Belgrano or Palermo, and others in the traditional neighborhoods of CABA will continue to benefit from this new tool.
Meanwhile, Denise García Balbi , from DGB Real Estate, highlighted that “neighborhoods such as Devoto, Villa Luro or Villa del Parque are experiencing renewed interest due to new financing options.”
A challenge for the future has to do with the deadlines for granting a mortgage loan, a factor that often worries sellers, is the average time from the presentation of the documentation to the approval of the loan is between 60 and 90 days.
“The new tool promises to significantly boost the real estate sector, as it will allow developers to finance residential building projects while offering each buyer the possibility of assuming their own individual debt,” said Christian Zucchini of AS Real Estate.
Today, people from cities and neighborhoods such as San Isidro, Villa Urquiza and Palermo choose these areas, mainly thanks to the new financing possibilities offered by the market with the new credit systems.
“The recent construction of buildings in these neighborhoods, together with the presence of commercial premises of well-known gastronomic brands, reinforce the trend of opting for places where users can find everything they need, without sacrificing the tranquility of their surroundings,” concluded García Balbi.
www.buysellba.com
Source:
Por qué las hipotecas divisibles pueden transformarse en el nuevo motor para el mercado inmobiliario argentino
El sector desarrollador y constructor de viviendas tiene expectativas ante el DNU que promueve la compra de unidades desde el pozo. El Congreso deberá tratarlo al retomar la actividad legislativa, mientras que, por ahora, solo un banco lanzó esta propuesta
www.infobae.com
January 03, 2025
The housing development and construction sector has expectations regarding the DNU that promotes the purchase of units from the outset. Congress will have to deal with it when it resumes legislative activity, while, for now, only one bank has launched this proposal.
By Jose Luis Cieri
A construction site in the Núñez neighborhood. Divisible mortgages allow buyers to take on portions of debt in projects in the works
The recent Decree of Necessity and Urgency 1017/2024 introduced divisible mortgages (also called future or undivided mortgages) as an innovative tool that promises to transform the real estate sector in Argentina , especially with regard to construction projects in the pit and acquisition of properties without deeds.
This system launched by the Government (which must be reaffirmed by the National Congress when it resumes the legislative agenda in March) seeks to make credit more flexible and promote access to housing, and is already beginning to generate enthusiasm and expectations in different sectors of the market.
Pablo Pirovano , a mortgage law specialist and partner at Pasbba Abogados, highlighted to Infobae that “the possibility of dividing a mortgage originally constituted on a real estate development allows the credit and the mortgage guarantee to also be transferred to the respective purchasers.”
This means that each buyer can assume a proportional balance of debt corresponding to their unit, a modality that, according to Pirovano, “will increase the stock of available housing and strengthen price competitiveness.”
The lawyer emphasized that this model makes it easier for buyers to access financing without having to rely solely on their own savings, something essential in a country with mortgage credit difficulties. A few days ago, Banco Ciudad launched a UVA mortgage credit line to finance housing from scratch in CABA, with amounts of up to $350 million and terms of 10, 15 and 20 years.
The loans allow financing up to 75% of the value of the property and are intended for single, permanent housing in projects approved by the bank. They target small and medium-sized developments, with a majority of units up to 70 square meters, and offer preferential rates for central and southern areas of the city.
Regulation and scope
The regulation also extends its scope to the real right of surface , a modality that allows construction on other people's land and that can now be mortgaged. Pirovano argued that this encourages enormous advances in the market, since "it directly impacts access to housing at more affordable prices and generates a multiplier effect in the economy due to the investment and jobs generated in the construction sector."In this regard, the head of AS Real Estate, Alejandro Suárez , assured that this tool “will strengthen confidence”, while several projects located in CABA and Greater Buenos Aires report a significant increase in inquiries.
Among the main benefits of the system is the possibility of reducing the dependence on the initial investment of buyers and developers.
A favourable tax framework could boost the development of the sector and ensure its long-term sustainability.
Franco Robiglio , partner at Robiglio Abogados, explained that “the system requires that real estate projects meet certain requirements, such as a domain free of encumbrances and a precise description of the urban detail and the subdivision.”
The housing developers and builders maintain that this type of measure could generate greater clarity and develop a more stable regulatory framework for the sector. “The number, characteristics and destination of the future functional units or plots of land must be stated. The parties must also agree that once the division of the property is completed and ownership is transferred to each purchaser, the credit and mortgage guarantee can be divided for each unit, by the proportional balance,” added Robiglio.
For the buyer: insurance and tax incentives
Another of the highlights of the decree is the amendment to Article 2071 of the Civil and Commercial Code, which makes it optional for purchasers to take out insurance in the event of non-compliance in real estate transactions.Although it could initially be interpreted as unfavourable for the buyer, Pirovano defended this flexibility by arguing that “it will make transactions cheaper by leaving the decision to contract with developers who offer guarantees to the autonomy of the parties.”
This legislation could be complemented with new fiscal and financial incentives to ensure its positive impact. For example, the proposals include the creation of guarantee funds, tax reductions and measures by the Central Bank to facilitate more accessible credit.
The registry annotation and the market
The decree also promotes the registration of sales contracts in public registries or authorized entities, granting it a level of legal security comparable to that of the registry publicity provided for in the Civil and Commercial Code.
Villa Devoto attracts attention with new projects underway
This advance is essential in a market where operations in the field and under construction often depend on trusts or sales contracts that lack registration support. “It will facilitate the negotiation and transferability of properties, ensuring a more agile process for buyers,” said Pirovano.
In Caballito , a neighborhood with high demand, the owner of Connection Negocios Inmobiliarios, Eduardo Pérez , said that this modality “stimulates sales in bulk.”
Projects currently in pre-construction, and other new buildings close to the traditional English Quarter , are already receiving an increase in enquiries.
Projections 2025
The implementation of divisible mortgages and the return of mortgage loans have driven a significant increase in mortgage deeds in CABA. According to the Notary Association, nearly 2,000 transactions were registered between October and November , both for the purchase of used and brand new properties, the best figure since 2017.In this context, Tomás Oubiña , from Tomás Oubiña Properties, considered that “the current moment represents a unique opportunity, since the values per square meter are below replacement costs.”
Pérez agrees with this vision and predicts that projects located in Caballito, Belgrano or Palermo, and others in the traditional neighborhoods of CABA will continue to benefit from this new tool.
Meanwhile, Denise García Balbi , from DGB Real Estate, highlighted that “neighborhoods such as Devoto, Villa Luro or Villa del Parque are experiencing renewed interest due to new financing options.”
A challenge for the future has to do with the deadlines for granting a mortgage loan, a factor that often worries sellers, is the average time from the presentation of the documentation to the approval of the loan is between 60 and 90 days.
“The new tool promises to significantly boost the real estate sector, as it will allow developers to finance residential building projects while offering each buyer the possibility of assuming their own individual debt,” said Christian Zucchini of AS Real Estate.
Today, people from cities and neighborhoods such as San Isidro, Villa Urquiza and Palermo choose these areas, mainly thanks to the new financing possibilities offered by the market with the new credit systems.
“The recent construction of buildings in these neighborhoods, together with the presence of commercial premises of well-known gastronomic brands, reinforce the trend of opting for places where users can find everything they need, without sacrificing the tranquility of their surroundings,” concluded García Balbi.
www.buysellba.com
