Banks will support Sheinbaum’s housing plan, says BBVA

Mexico City. The banking sector will play a key role with the next government, as it will be an ally in carrying out the housing plans of President-elect Claudia Sheinbaum, said Alejandro Cárdenas, general director of corporate, government, auto and mortgage banking at BBVA México.

“In the housing policy (of the next government) we have always been very close to the organizations and seeking to support. We see this as an opportunity for any change that is implemented, the entire bank will be able to participate to really support and promote it,” said the executive.

Claudia Sheinbaum has stated on multiple occasions that one of her main projects is the construction of one million affordable homes for the Mexican population and in this way be able to eradicate the deficiencies that have been generated by previous governments.

“Many things must be done to boost the lowest segment of social interest housing, but commercial banks need to be involved and we have to be part of that financing and that is why we will remain close, supporting… Any change will be driven by commercial banks,” said Cárdenas at a press conference.

Mortgage credit slowdown will soon end

The BBVA executive also indicated that the mortgage credit segment is going through a period of deceleration as a result of the higher costs of this type of financing and also the increase in the prices of construction materials.

“There has been a slowdown in the last two years, and some of the factors that influence this are inflation, the increase in the cost of construction materials, labor, the depreciation of housing, and also the increase in the cost of credit, which is linked to high reference rates. This limits the payment capacity of buyers and that has had an impact,” said Cárdenas.

Data from the National Banking and Securities Commission (CNBV) indicate that at the end of the first half of the year, the balance of the mortgage financing portfolio by banks reached an amount of one trillion 378 thousand 853 million, which implied an 8 percent growth in nominal terms with respect to what was reported in the same period of 2023. However, last year, the growth rate was 10.7 percent.

However, Cárdenas said, the expectation that the Bank of Mexico (BdeM) will continue with the cycle of reductions in the reference rate – the instrument that sets the cost at which companies and families finance themselves – for the remainder of the year, gives optimism to expect that this type of financing will pick up in the second half of the year.

“Mortgage interest rates did not rise more than the central bank’s reference rate… The rate reduction cycle has already begun, and there are indicators that this will continue in September, so this good expectation that the rate will be lowered and that banks will make adjustments gives us a scenario where we could return to those rates of 7 or 8 percent,” he emphasized.

BBVA expects to issue nine thousand mortgage loans for an amount greater than 39 billion pesos during the second half of 2024.