By Hernan Nessi
BUENOS AIRES (Reuters) – Argentina’s mortgage market, for years almost non-existent due to spiraling triple-digit inflation and high borrowing costs, is starting to show signs of coming back to life under the pro-market reforms of libertarian President Javier Milei.
Monthly new mortgages in Buenos Aires province, home to 40% of the country’s population, hit the highest level since 2018 at the start of the year, data from the local college of notaries show. Numbers were up nearly 500% in February year-on-year.
Milei, a bombastic economist who took office in late 2023, has shaken up the country with tough austerity and cost-cutting, which has helped bring down inflation, overturn a deep fiscal deficit, and boost confidence among investors and banks.
“The conditions needed have been set up for the financial system to offer mortgages, with an initial push from public banks and then private banks,” said Guillermo Longhi, president of the Buenos Aires province notaries body.
The overall mortgage loan market, while still tiny due to the country’s years of high inflation and currency intervention, has tripled in size to the equivalent of around $2.3 billion, central bank data shows, still well off a peak of $8.3 billion in 2018.
Longhi said the government needed to ensure financial stability, keep bringing inflation down and boost confidence in exchange rate policy, currently tightly controlled.
“The future of mortgage lending will be conditioned primarily by the evolution of key macroeconomic variables, such as inflation, the exchange rate, and overall economic stability,” Longhi added.
(Reporting by Hernan Nessi; Editing by Adam Jourdan and Alison Williams)
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