:quality(80)/cloudfront-us-east-1.images.arcpublishing.com/lanacionar/XNY6HMLXZVE6FP3FK65QSORDZU.JPG "Buying a house: the unusual salary that must be earned in Argentina to access a mortgage loan")
Buying a home is one of the most thoughtful long-term decisions. “That is why certainty is essential”, assured the economist Federico González Rouco, author of the books The Story and Owners or Tenants: how to think about access to housing?. In a general analysis of the real estate market that he carried out in the 7th. Real Estate Summit organized by LA NACION, he analyzed the unruly macroeconomic context in which inflation, lack of credit, rental law, among other factors of great weight, intervene.
“We are standing at a time of economic and political instability and uncertainty. We had three finance ministers in one month, something that had not happened since the exit from convertibility. To this is added an inflation that we have not experienced since the exit of the hyper and is not necessarily reaching its peak. Salaries, in dollars, are also 60% below compared to 2017, and with economic activity trying to recover, but with many obstacles”, González Rouco summarized the current scenario.
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The path to a destabilized macro was built from major milestones that happened concentrated from 2016 to this part: UVA loans were given (the level of mortgage loans in 2016 and 2017 had only been seen in Argentina in the first presidency of Perón and in a part of Menem’s) that later, after the devaluation that began in 2018, quickly ended. To this was added the freezing of rents, the new law that regulates them, the consequent increases in them. “This made it difficult to think ahead,” the author concluded.
It is in this contextual framework that González Rouco believes that the dreams of living in one’s own place begin to fade: “We are at a breaking point, in which the aspiration of an entire generation to access their own home is broken”, and added: “Today there is no demand, and the segment that could give volume to the market is outside. You cannot enter due to lack of mortgage credit. Currently, in Argentina, to access a loan you need to have income above $800,000″.
For González Rouco, a possible answer to the housing problem that we find ourselves with is create compensation funds, a positive initiative that all parties agree to support. For this reference, what is now missing is to speed up the decision to implement it.
Why do you need to take that step? “The level of deeds has been the worst in the last three years. It is true that there is little activity in the market and that this generates opportunities for those who can buy, but there is also little activity because there are no true value references.”
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In that line, he added some statistics that complete the x-ray. “Prices in CABA fell 11% compared to the minimum of the last eight years, but that was aimed at the value in dollars per square meter. This happens due to the exit of the demand, and at the same time it is not easy to know the real value due to the few operations that are closed. They ask us: are prices going to continue to fall? We see little chance,” he noted.
In Argentina, 2.5 million homes rent, a figure that grew by 16% since 2016. 75% of these homes are distributed in five provinces.
“For these people, paying the rent each month consumes 39% of their income, when a couple of years ago it involved 30%. This is explained by two factors: three points correspond to the increase in the rental value itself, but the other six are due to the loss of purchasing power. Today the rents increase due to annual inflation averaged with the salary, that gives us relative increases of 65%, but in the coming months it will be from 75% to 80%”, explained the economist.
The worst moment of the last decade was in January 2012, when the rent represented 49.5% of the average income. At that time, the salary was $5,352 and the rent averaged $2,655 per month. At the other extreme, the most favorable situation in this regard occurred in April 2020, at the beginning of the quarantine due to the coronavirus pandemic in Argentina, when rent represented 35.2% of income.
For the economist, construction is at high levels compared to the last decade, and there is even room for it to continue growing. However, the scourge is that “the gap between construction cost and wages is highthen there are opportunities for developers, but it is not enough for the properties to be accessible for the demand”, said González Rouco.
In this context, “there is no longer time to take initiatives, because there is a generation that hopes to be able to access housing. If the macroeconomy gets its order, the rest does too”, he concluded.
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