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The mortgage market closed 2020 with a 2.7% contraction in the number of loans, due to the fact that public institutions and commercial banks placed less credit due to the contraction in demand for housing; However, the weighted average rate for home purchase granted by commercial banks fell to 9.4% in 2020, which benefited all entities in the country and helped to cushion the fall in demand in the face of the economic crisis, according to the report “Real Estate Outlook Mexico 1H21”.
Carlos Serrano Chief Economist of BBVA Research Mexico, indicates in the reference study that the crisis was taken as an investment opportunity by those segments of the population least affected; However, this was not enough to make the sector grow, which was even fragile before the crisis caused by the pandemic.
According to the information, the contraction of the sector is explained by the loss of formal jobs, which contracted 3.2%, while the wage bill barely grew 1.3% at the end of 2020, most of the job losses were gave in the lowest salary segments.
The current mortgage loan portfolio registered an increase of 12.7% in the last quarter of 2020, thanks to higher origination. On the other hand, non-performing loans went from 2.8% in February to 3.3% in December 2020. The deterioration will be more evident now that the support measures have ended.
The mortgage market reflected the lower demand for housing, mainly in the middle and low-income segments. In 2020 2.7% fewer loans were originated and 6.2% less mortgage amount. Public institutions granted 373 thousand mortgage loans, while banks 120 thousand, variations of -2.9% and -11.3%, respectively.
The total amount of mortgage credit was 389 billion, of which 197 were from commercial banks and the rest from Infonavit and Fovissste. The average mortgage rose in the case of commercial banks as the demand for residential housing improved in the last quarter of the year.
The study highlights that, with the stoppage of activities, the supply also decreased, which helped prevent inventories from accumulating. However, as of November the trend was reversed and more projects began to be registered, albeit marginally. Although the fall in the demand for housing slowed down the rate of appreciation of these properties, the fact that inventories have not accumulated allowed the appreciation to close at 5.4%.
He adds that as long as there is no generalized recovery in employment and investment, uncertainty will continue during 2021.
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