Now S/ 1,000 more income is required to qualify for a mortgage | economy | ECONOMY

The average interest rate in soles on mortgages rose from 5.87% to 8.14% during the last year, said Paola GalliVice President of Real Estate Investments Credicorp Capital.

A similar behavior is exhibited by the interest rate in dollars on these loans, whose rise has increased since last April and stands today at 6.89%, he added.

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The increase in the interest rate directly affects the monthly installment of the credit, and with it the client’s qualification for a mortgage, he said. The bank considers that in order to grant the credit, the client’s monthly installment should not exceed 35% or 40% of their monthly income.

For example, for a client who wants to buy a home for S/ 450,000, an increase in the interest rate of one percentage point would mean an increase of S/ 350 in the monthly installment, the executive estimated. Thus, to qualify for the mortgage, the client will now need to earn S / 1,000 more per month, since he must face the increase in the installment of S / 350 (equivalent to 35% of the S / 1,000 income), she explained.

Stabilization

The BCR estimates that inflation will slow down until it reaches the target range in mid-2023, so from then on mortgage loan rates should stabilize, Galli said.

The rise in rates, the local political climate and the increase in home prices have slowed sales of these units in recent months, he said.

“The decrease in sales levels has been observed in all segments, in Lima Moderna, Lima Top, Lima Este and Lima Centro. It is a general behavior of the housing market due to this increase in interest rates”he claimed.

And stand by

He explained that many clients, faced with the rise in rates, have decided to leave their home purchase decisions on ‘stand by’. “They say: interest rates are high, we better wait a bit to see if they go down and then we buy. But that is not going to happen in the short term.held.

He stressed that these people have a real need to acquire housing, so the decision to wait could change in the coming months.

In addition, the Government took measures to improve the liquidity of families, such as the release of AFP and CTS funds, which could help the recovery of home sales in the following months, he added.

If the housing deficit and the recovery of the labor market are added to this, at the end of the year the sale of houses in Lima would grow slightly compared to previous years, he said.

High vacancy in prime offices in the next 36 months

The prime office segment faces a very tough environment, with a vacancy that bordered 300,000 square meters in Lima at the end of 2021, he said. John Francis Arandavice president of real estate transactions Credicorp Capital.

He estimated that the vacancy rate of these offices will remain high for the next 36 months. The effect of the pandemic and the political instability the country is going through have been unfavorable for the prime office landscape, he said. There may be additional demand added this year, but supply will take time to be absorbed. “Additionally, we have several prime office projects that are going to begin to be delivered, around 60,000 square meters in the next 18 months”, said.

Lurín loses attractiveness for logistics companies

The real estate market growth opportunities are in the industrial and retail sectors, according to Credicorp Capital.

“Within the industrial field, the class A and B+ warehouses in Callao and Cercado de Lima have vacancies of less than 5%. We see a great opportunity to take advantage of underused or sublet properties trapped within gentrification, mainly in the Cercado de Lima”held John Francis Arandaof the investment bank.

Today land freight is more expensive than the cost of storage in warehouses located in Lurín, he said.

This means that logistics companies do not see it as attractive to generate more square meters in Lurín, and prefer Callao and Cercado de Lima, he said.

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