Argentina : Developing Deep and Sustainable Housing Finance Markets

Format:

Book

Government document

Author/Creator:

World Bank Group

Series:

Other Financial Sector Study

World Bank e-Library

Language:

English

Subjects (All):

Access to Finance.

Capital market.

Capital Markets and Capital Flows.

Finance and Financial Sector Development.

Housing Finance.

Urban Development.

Housing.

Other Title:

Argentina

Place of Publication:

Washington, D.C. The World Bank 2017

System Details:

data file

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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