For many sectors, 2020 was a year of changes and adaptations due to the health emergency of Covid-19, but in the real estate market and especially in the housing supply there were not many changes, as Paulina Prieto commented in an interview for Inmobiliare, VP of Mortgage and Automotive Credit of Scotiabank.
“Obviously, there were effects, especially in the months of April, May and June in a certain way in the origination of credits for all this issue [pandemia] and the uncertainty. In July and August, some states were still on red and others on orange, but we gradually picked up the granting of loans. October, November and December were the best months, compared to 2019 ”.
It is a reality that the issue of the pandemic is still present, since some states such as Mexico City and the State of Mexico returned to a red light in December 2020, but despite these circumstances, Paulina Prieto stressed that the real estate market has learned not to stop loan origination.
VP of Automotive Credit e
Scotiabank Mortgage.
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Regarding new and used housing loans, the Vice President mentioned that from 2014 to 2015 origination was concentrated in new properties with 70% and 30% used, but in recent years this percentage has equaled, “we are practically 55% new and 45% used” in 2020.
Another relevant factor last year was the stabilization of housing prices, as in the residential plus segment, which are properties above 5 million pesos and are located mainly in large cities.
Likewise, indicated that in general terms with respect to the year that ended for the housing mortgage credit industry in all sectors such as housing agencies (Infonavit and Fovissste) and commercial banking “It was a good year.”
During 2020, Scotiabank originated more than 32 thousand 300 million pesos, that is, around 20 thousand loans; 4Q2020 has been the quarter with the most loan applications, as reported by its VP of Mortgage and Automotive Credit. The bank’s average credit is 1.7 million pesos and that offered by Scotiabank is very similar, since it is around 1.8 million.
Customer support
In April 2020, the National Securities Banking Commission carried out the restructuring and expansion plan of loans and mortgage support, which had a validity of three months. At Scotiabank “we gave 4 months, which was the industry standard and for all credit products, but for some clients this period was extended by 2 more months, making it 6”.
What’s more, In order to provide solutions to its clients in this time of crisis, the bank has decided to launch restructuring products and new deferral plans, According to Paulina Prieto, an analysis of her clients has been carried out to offer them support.
“We have had an important range of products to have a suitable set, because it is very relevant to understand that not all customers have the same need; there will be clients that still today do not recover their payment account, and even if it is restructured they cannot make those payments ”.
Projection for 2021
In terms of origination for this year, Paulina Prieto predicted that the market will grow 10% versus what originated in total in 2020; while portfolios will increase between 8 and 9 percent. “I hope that 2021 will be much stronger and more solid than 2020, since we have understood how we can produce, I am aware that we are in the middle of the pandemic, but we can say that there are many factors in this industry that give a good outlook, likewise one must be very cautious to see what is going to happen in the coming months ahead ”.
Paulina Prieto commented that “today is undoubtedly the best time for the buyer”, since it is below the weighted average rate of 2015, and there is also a stabilization of house prices.
Regarding the products and offers that Scotiabank will offer in 2021, the VP of Credit indicated that they are currently working on the entire contracting flow, and are designing a new platform. He also commented that now the bank is offering loans with a rate from 7.40 percent. “When Scotiabank sees an opportunity to offer better financial terms to customers, we will be the first to raise our hands.”
By Rubi Tapia
This is an excerpt from the Mortgage Industry Outlook 2021 article from Issue 124 https://inmobiliare.com/inmobiliare-124/
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