Mortgage credit appears in Argentina despite the context of high inflation

Three banks surprised by announcing the return of the offer of mortgage loans in Argentinahistorically low in the South American country due to the high inflation and economic uncertainty.

The mayor of Buenos Aires, Jorge Macri, announced this Monday the new mortgage loans from Banco Ciudad for the acquisition, renovation, improvement and expansion of homes, in a measure that seeks to benefit the middle class and support development in the Microcenter area. of the Argentine capital, with uninhabited buildings after the covid-19 pandemic.

Last week, Banco Hipotecario and Banco Supervielle had announced that they will offer mortgage loans starting next May.

Mortgage credit has no development in Argentina -es 0.1% of GDP, according to the Central Bank – due to high inflation levels – last March it climbed to 287.9% annual – and the uncertainty about public policies that especially affect long-term credits.

The lack of mortgage credit makes it difficult for those who do not have an inheritance in hard currency to access their own home and increases the demand for rentals or makes it difficult for young people to move out of the family home.

“Whichever way you look at it, it’s great news”published the Undersecretary of Press of the Government of Javier Milei, Javier Lanari, on his social networks: “The return of mortgage credit will revalue the properties (which are on a historic floor), attract real estate investors and reactivate construction”he added in the message that was replicated by the Argentine president.

The return of mortgage credit occurs in a context in which the Central Bank maintains negative interest rates in real terms to receive funding from the banks, which encourages credit to the private sector, and in which a slowdown is expected. inflation in the next twelve months.

Banco Ciudad offers financing of up to 250 million pesos (about US$ 250 thousand), for up to 20 years, whose capital is tied to inflation because it is measured in Purchasing Value Units (UVAs), and charges a rate of nominal annual interest of 3.5% for investment in the Microcenter and 5.5% for the rest.

These credits allow financing up to 75% of the sale value of the property to be acquired and the fee must not exceed the 25% of the net income of the applicant or his or her family group.

The Mortgage Bank also offers credit up to 250 million pesos (about US$ 250 thousand), but with a term of up to 30 years, the capital in UVAs and an annual nominal interest rate of 8.5% bonus to fifty% the first year for those who prove their salary in that entity.

These loans allow you to finance up to 80% of the sale value of the property to be acquired, with an income quota ratio of 25%.

Supervielle is the first private capital bank to relaunch mortgage loans – whose proposal will be announced on May 4 – to acquire permanent or non-permanent housing or to expand or renovate it.

Although the mortgage loan in UVAs – launched during the government of Mauricio Macri (2015-2019) – generated controversy due to the increase in monthly installments in a context of high inflation and above the increase in salaries, the delinquency of mortgages to families is 1%according to the Central Bank.

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