2021 was a better year for buying a home. There was an 18% growth in new construction contracts, according to the results of the sample survey of the Association of Housing Real Estate Developers of Ecuador (Apive).
70% of promoters believe those bookings were good or fair. And 85% believe that the sales of the next six months will be as well.
Although the annual variation of the net reserved units in 2021 grew 17.9% in relation to 2020, compared to 2019 pre-pandemic it is still 7.6% below.
The worst pre-pandemic year for the housing market was 2016 and compared to this, 2021 shows a growth of 19.2%.
The best year was 2012 and compared to that, 2021 has an annual variation of -53%.
In credit there is also growth. In 2021, $1,767.7 million in mortgage loans were placed in Ecuador, which represents an increase of 54.9% ($626.7 million more) compared to 2020.
In this period, private financial institutions increased their share of total mortgage credit to 67%, while the Bank of the Ecuadorian Social Security Institute (Biess) lowered its share to 33%:
- The credit granted by the private financial system was $1,175.7 million and is 58% more ($431.5 million) compared to 2020 ($744.1 million).
- The increase in the Biess was 49.2%, going from delivering $396.8 million in 2020 to $592 million in 2021. The placement amount reported in 2021 does not include the credit given for “Mortgage replacement / Purchase portfolio”.
“This worries the sector, since this institution is the main provider of loans for the purchase of finished housing. in the country. It is important to highlight that the Biess managed to place 67% of the total housing credit in 2013″, indicates the Apive report.
The union also highlights that “not all of this increase corresponds to the financing of new finished housing”, and explains it with the analysis of the destination of the credit granted:
- 37.4% or $439.70 million of the $1,175.7 million placed in 2021 by the financial system went to the new finished housing loan segment.
- In Biess, according to the Central Bank report, of the $592 million placed, 90.5% ($535.76 million) went to the finished housing segment. It is not determined how much of that total corresponds to new construction and how much to second use.
These figures mean that of the total number of mortgages, 55.5% was allocated to finished construction.
Thus, despite the fact that the Biess has reduced its participation in the placement of mortgage loans, it continues to be the main actor that finances finished homes, since of the $975.5 million delivered in this segment, the IESS Bank contributed with 54, 9%.
How it will be possible to encourage demand and regain prominence in mortgages is one of the questions that the real estate promoters’ union asked the general manager of Biess, Iván Tobar. And these are his responses:
- The corporate channel for real estate projects will be strengthened, which aims to simplify procedures and therefore reduce the concession time, this is possible since we are working in an articulated manner between the public and private sectors.
- We will promote the by-products of mortgage loans: construction, land, acquisition of offices, commercial premises, clinics, through analysis and subsequent improvement in the granting conditions that facilitate access by members.
- We have undertaken a mechanism for mortgage portfolio securitization that allows us to attract resources from abroad in order to finance housing and contribute to the revitalization of the economy and sustainability of dollarization.
Biess’s goal for 2022 is to deliver $752 million in mortgages.
In the first two months, $103 million have already been financed in 1,801 operations. The average amount is $57,626.
How is the Biess mortgage loan offer different from the offer of private financial institutions?
Biess offers financing facilities and conditions that compete with the market, such as:
- Interest rates from 5.99%.
- Maximum term of up to 25 years.
- Financing of up to 100% of the property’s appraisal.
- Financing of the expenses that generate the improvement of the sale and constitution of the mortgage.
What reforms are you working on at the Biess?
Among the main reforms are:
- Conditions for settlement of mortgage obligations.
- Increase of the term for credits destined to the purchase of commercial premises, offices and clinics.
- Improvement in financing conditions for housing construction.
- Promotion of preferential housing. (I)
Source: Eluniverso
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