Argentina : Developing Deep and Sustainable Housing Finance Markets
The housing deficit in Argentina is estimated to affect 6 million out of the 24 million households nationally. Macro-economic turmoil has contributed to this imbalance in two ways. First, the continuous inflation and currency depreciation made real...
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| Format: | Report |
| Language: | English English |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/248871498688500827/Argentina-Developing-deep-and-sustainable-housing-finance-markets http://hdl.handle.net/10986/28324 |
| Summary: | The housing deficit in Argentina is
estimated to affect 6 million out of the 24 million
households nationally. Macro-economic turmoil has
contributed to this imbalance in two ways. First, the
continuous inflation and currency depreciation made real
estate a refuge investment protecting the capital value of
investors. Second, rapid inflation acts a strong deterrent
to the provision of long term finance and in particular
mortgages. The government overhauled the public housing
assistance policy by launching a 2016-2019 integrated
housing and habitat plan (plan integral de vivienda y
habitat). This plan aims to stimulate the production, or to
provide one million housing solutions through two programs:
a neighborhood improvement program targeting informal
settlements, and a credit-linked subsidy program, solucion
casa propria, through which up-front subsidies are granted
to first time home buyers who contract mortgages, thus
leveraging the impact of public intervention with bank
credit. The broad prohibition of indexation has for a long
time stunted the provision of long term, finance. To
successfully grow the mortgage market, banks need funding
and tools to manage interest rate and liquidity risks - that
is, in the absence of significant derivative markets,
funding from the capital market. The eventual development of
a mortgage bond market based on housing loan portfolios,
will help to increase the supply of stable long term funding instruments. |
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