Have Gov’t Policies Aided Argentine Mortgage Lenders?

Earlier this year, the government of Argentine President Mauricio Macri launched a program to provide subsidized mortgages to 90,000 middle-class Argentines. // File Photo: Argentine Government.

Argentines took out mortgage loans totaling 3.7 billion pesos ($219.32 million) in June, an increase from 558 million pesos in the same month last year, according to central bank data. The increase came after President Mauricio Macri’s government launched subsidized mortgage programs targeting the middle class, as well as low-interest loans that are indexed to inflation. How significant is mortgage lending, and the government’s programs, to lenders in Argentina? To what extent should the country’s government encourage higher levels of mortgage lending? Have Macri’s policies aided Argentina’s housing lenders, and is the recent spike in mortgages likely to continue for long?

Marta Colomar-Garcia, administrative managing partner at Diaz, Reus & Targ, LLP: “Half of the Argentine population makes less than the equivalent to $1,000 a month, making it almost impossible for the vast majority of the population to obtain a mortgage. In fact, mortgages were less common in Argentina than in other parts of Latin America. However, President Macri has undertaken some measures that are allowing Argentina’s property market to rapidly emerge from a long crisis. Internationally, Macri has also ended the country’s ‘default’ status by repaying the bondholders that sued Argentina for more than $9 billion in defaulted bonds, and he has opened the economy to foreign markets. Internally, he has devalued the currency and lifted tight exchange controls largely blamed for Argentina’s property market debacle. Notably, Macri has recently launched a subsidized mortgage plan that has helped thousands of Argentines with low monthly incomes. He has also launched another plan that provides low-interest mortgage loans adjusted for inflation. The demand for…”

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