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Mortgage loans: The impact of government measures on rates: Could they fall? - La Nacion Propiedades
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www.lanacion.com.ar
May 23, 2025
The Executive seeks to encourage the use of "dollars under the mattress
By Candela Contreras
Changes in the mortgage loan market due to the measures announced by the GovernmentDaniel Basualdo
This Thursday, Javier Milei's government announced a series of economic measures to encourage Argentines to use the " undeclared dollars under their mattresses."
The person in charge of communicating this was the presidential spokesman, Manuel Adorni, who emphasized that from now on, "the principle of innocence" established by the National Constitution will be respected, under the name: "Plan for the Historic Repair of Argentine Savings . "
"Argentines are once again innocent until ARCA proves otherwise; your dollars, your decision," Adorni said, explaining that the plan will have two stages: one implemented by the government through a decree, and the other, a bill that will be sent to Congress.
The government's message is clear: to boost the dollar market with fewer controls. The goal is to ensure that more than US$200 billion, currently outside the financial system, enters the formal market.
The news generated excitement in the real estate market due to its potential positive impact. What the government is seeking is to move away from the logic of "buying a shoe in installments and a house in cash." This was stated by the head of ARCA (formerly AFIP) at the press conference.
That phrase—increasingly repeated among the economic team—encapsulates the shift in mentality the government wants to bring to the market: for Argentines to regain confidence in mortgage lending , which returned to the game in mid-2024. “The State must stop treating good people as if they were criminals for default,” said Economy Minister Caputo himself. “Trust is a two-way highway. If money circulates freely, the country will move forward, ” he added.
The official explained the new scenario with macroeconomic rationale: after months of fiscal and monetary adjustment, the country went from having an economy with a surplus of pesos to one with a shortage. Today, the monetary base represents just 6 percentage points of GDP, when historically it was double that amount. Therefore, the government is promoting a process of remonetization of monetary resources , emphasizing that it doesn't matter whether it is in pesos or dollars.
"We're in a currency competition. It makes no difference to us whether the economy remonetizes in pesos or dollars. Today, there are five to ten times more dollars than pesos; the natural thing is for the process to occur in dollars," Caputo acknowledged.
Economy Minister Luis Caputo announced the new government measures.Video capture
Federico González Rouco, an economist specializing in housing, interprets this phenomenon as a natural response to the imbalance between supply and demand : "There is a huge demand that has grown very quickly, and at the same time, funding mortgage loans is expensive for banks because they involve loans with very high ticket prices," he said.
“ Without securitization, banks don't want to lend money . The interest-to-income ratio is very high—25%—so we can't do anything with it. If the credit market doesn't develop, it's very difficult for prices to recover,” said Magdalena Day, director of the Mday Group.
In reality, many private banks have no interest in lending. But faced with the pressure of demand, they end up offering and granting credit ... albeit at higher rates . The increase acts as a filter: it restricts the entry of new applicants and limits the bank's exposure. Daniel Obetko, manager of Premium Residential at Interwin, analyzes that mortgage loans in Argentina have not grown more than they already have —between 2,000 and 3,000 granted per month—"because the banks are not determined to grant more, because the number of inquiries has increased exponentially."
Given this scenario, with the new measures announced, the Executive hopes to reverse the banks' intention to continue to close the credit spigot : "More and more people want to take out loans, but some banks no longer have pesos to lend. Therefore, we need more money in the economy," Minister Caputo himself acknowledged.
"These are extremely positive measures for the market," said Fabián Achával, a real estate analyst. " If liquidity actually increases, banks will be able to offer more loans . Furthermore, by eliminating the requirements to prove the source of funds, many transactions that are currently failing will be able to be completed." Bank liquidity is crucial to maintaining real estate market activity and banks' ability to continue financing homes through mortgage loans.
"These measures generate positive expectations in a market that has been performing increasingly better, with a certain optimism. Although the change may not be immediate, in the longer term it will be reflected in a greater number of mortgage loan transactions," Obetko adds.
At the same time, the Executive aims to eliminate some restrictions on the purchase and sale of property . One of the key measures is the end of traditional controls on the source of funds in real estate transactions . This, according to industry players, was holding back a large number of sales.
“ Over the last year and a half, we've seen a significant real estate recovery, which continues to accelerate sharply , thanks to various public measures being taken,” says Fabián Narvaez, president of the Narvaez real estate and development company.
Achával recalled that the Asset Regulation Regime, better known as money laundering, allowed for the regularization of some undeclared capital, but that significant restrictions still persisted. " There are many people with undeclared savings who can't prove their source . These measures eliminate that obstacle," he stated.
According to the broker, the impact will be felt through two channels: more mortgage lending —due to greater availability of money in the system— and more real estate transactions —because they will no longer be cancelled due to formal requirements.
"The government has already passed several milestones: the agreement with the IMF, the money laundering process, the end of the financial controls, and now these measures . All of this will have a direct impact on the real estate market ," Achával noted.
The Ministry of Economy emphasizes that the goal is to stop viewing those who took refuge in real estate as suspects . "They were people suffocated by taxes and regulations. Not criminals," they said.
“The government's approach to easing these types of restrictions is boosting people's morale. And with an optimistic mood, all markets improve, and the real estate market is no exception ,” shares Martín Boquete, director of Toribio Achával.
"A lot of the money from the cushion will go to the real estate sector as a first step," says Juan Manuel Tapiola, founder and CEO of the developer Spazios. "I'm very positive about how all real estate transaction processes will be simplified," he adds.
In this new scenario, the goal is for banks to once again behave like banks and for Argentines to recover a key tool for accessing housing: credit .
"When you have a healthy economy, that economy starts to demand more money, and with that, credit also starts to grow," Caputo insisted during the interview with reporters.
www.buysellba.com
Source:
Créditos hipotecarios: el impacto de las medidas del Gobierno en las tasas: ¿podrían bajar?
El Ejecutivo busca incentivar el uso de los “dólares bajo el colchón”
www.lanacion.com.ar
May 23, 2025
The Executive seeks to encourage the use of "dollars under the mattress
By Candela Contreras
Changes in the mortgage loan market due to the measures announced by the GovernmentDaniel Basualdo
This Thursday, Javier Milei's government announced a series of economic measures to encourage Argentines to use the " undeclared dollars under their mattresses."
The person in charge of communicating this was the presidential spokesman, Manuel Adorni, who emphasized that from now on, "the principle of innocence" established by the National Constitution will be respected, under the name: "Plan for the Historic Repair of Argentine Savings . "
"Argentines are once again innocent until ARCA proves otherwise; your dollars, your decision," Adorni said, explaining that the plan will have two stages: one implemented by the government through a decree, and the other, a bill that will be sent to Congress.
The government's message is clear: to boost the dollar market with fewer controls. The goal is to ensure that more than US$200 billion, currently outside the financial system, enters the formal market.
The news generated excitement in the real estate market due to its potential positive impact. What the government is seeking is to move away from the logic of "buying a shoe in installments and a house in cash." This was stated by the head of ARCA (formerly AFIP) at the press conference.
That phrase—increasingly repeated among the economic team—encapsulates the shift in mentality the government wants to bring to the market: for Argentines to regain confidence in mortgage lending , which returned to the game in mid-2024. “The State must stop treating good people as if they were criminals for default,” said Economy Minister Caputo himself. “Trust is a two-way highway. If money circulates freely, the country will move forward, ” he added.
The official explained the new scenario with macroeconomic rationale: after months of fiscal and monetary adjustment, the country went from having an economy with a surplus of pesos to one with a shortage. Today, the monetary base represents just 6 percentage points of GDP, when historically it was double that amount. Therefore, the government is promoting a process of remonetization of monetary resources , emphasizing that it doesn't matter whether it is in pesos or dollars.
"We're in a currency competition. It makes no difference to us whether the economy remonetizes in pesos or dollars. Today, there are five to ten times more dollars than pesos; the natural thing is for the process to occur in dollars," Caputo acknowledged.
Economy Minister Luis Caputo announced the new government measures.Video capture
The impact on mortgage loans
Despite the fact that mortgage financing has been reactivated for over a year, mortgage lending faces several challenges. Without going any further, in recent weeks, 12 banks raised rates, despite the economic restructuring : today they average 7.8% , about 20% more than they were launched. This has a direct impact on the pockets of potential borrowers, since higher rates require more income to qualify.Federico González Rouco, an economist specializing in housing, interprets this phenomenon as a natural response to the imbalance between supply and demand : "There is a huge demand that has grown very quickly, and at the same time, funding mortgage loans is expensive for banks because they involve loans with very high ticket prices," he said.
“ Without securitization, banks don't want to lend money . The interest-to-income ratio is very high—25%—so we can't do anything with it. If the credit market doesn't develop, it's very difficult for prices to recover,” said Magdalena Day, director of the Mday Group.
In reality, many private banks have no interest in lending. But faced with the pressure of demand, they end up offering and granting credit ... albeit at higher rates . The increase acts as a filter: it restricts the entry of new applicants and limits the bank's exposure. Daniel Obetko, manager of Premium Residential at Interwin, analyzes that mortgage loans in Argentina have not grown more than they already have —between 2,000 and 3,000 granted per month—"because the banks are not determined to grant more, because the number of inquiries has increased exponentially."
Given this scenario, with the new measures announced, the Executive hopes to reverse the banks' intention to continue to close the credit spigot : "More and more people want to take out loans, but some banks no longer have pesos to lend. Therefore, we need more money in the economy," Minister Caputo himself acknowledged.
"These are extremely positive measures for the market," said Fabián Achával, a real estate analyst. " If liquidity actually increases, banks will be able to offer more loans . Furthermore, by eliminating the requirements to prove the source of funds, many transactions that are currently failing will be able to be completed." Bank liquidity is crucial to maintaining real estate market activity and banks' ability to continue financing homes through mortgage loans.
"These measures generate positive expectations in a market that has been performing increasingly better, with a certain optimism. Although the change may not be immediate, in the longer term it will be reflected in a greater number of mortgage loan transactions," Obetko adds.
At the same time, the Executive aims to eliminate some restrictions on the purchase and sale of property . One of the key measures is the end of traditional controls on the source of funds in real estate transactions . This, according to industry players, was holding back a large number of sales.
“ Over the last year and a half, we've seen a significant real estate recovery, which continues to accelerate sharply , thanks to various public measures being taken,” says Fabián Narvaez, president of the Narvaez real estate and development company.
Achával recalled that the Asset Regulation Regime, better known as money laundering, allowed for the regularization of some undeclared capital, but that significant restrictions still persisted. " There are many people with undeclared savings who can't prove their source . These measures eliminate that obstacle," he stated.
According to the broker, the impact will be felt through two channels: more mortgage lending —due to greater availability of money in the system— and more real estate transactions —because they will no longer be cancelled due to formal requirements.
"The government has already passed several milestones: the agreement with the IMF, the money laundering process, the end of the financial controls, and now these measures . All of this will have a direct impact on the real estate market ," Achával noted.
The Ministry of Economy emphasizes that the goal is to stop viewing those who took refuge in real estate as suspects . "They were people suffocated by taxes and regulations. Not criminals," they said.
“The government's approach to easing these types of restrictions is boosting people's morale. And with an optimistic mood, all markets improve, and the real estate market is no exception ,” shares Martín Boquete, director of Toribio Achával.
"A lot of the money from the cushion will go to the real estate sector as a first step," says Juan Manuel Tapiola, founder and CEO of the developer Spazios. "I'm very positive about how all real estate transaction processes will be simplified," he adds.
In this new scenario, the goal is for banks to once again behave like banks and for Argentines to recover a key tool for accessing housing: credit .
"When you have a healthy economy, that economy starts to demand more money, and with that, credit also starts to grow," Caputo insisted during the interview with reporters.
www.buysellba.com
