Mortgage loans: middle class, young people, and employees
The new mortgage debtors: UVA loans are back, but the middle class faces new barriers to accessing their first home.
Middle class, young people, and in dependent employment. If one had to simplify, that is the stereotype of the mortgage debtor of 2024 according to the Financial Inclusion Report published by the Central Bank. In the first half of 2024, a reactivation in the offer of UVA mortgage loans by financial entities was observed. This trend was accompanied by a renewed interest from the population in this type of financing for the acquisition of their own, unique, and permanent housing.
The new mortgage debtors mostly belong to middle and high-income segments, with a significant presence of people with formal and stable jobs. This trend indicates that, although there has been a reactivation in the offer of mortgage loans, access to them remains limited for lower-income sectors or those with informal jobs, which poses challenges in terms of financial inclusion.
As of June 2024, 85% of new mortgage debtors had registered salaried employment in the private or public sector, showing a strong association between access to mortgage credit and formal job stability. At the same time, 44% of new holders are people between 30 and 40 years old, and 36% are in the next decade.
Regarding geographical distribution, 80% of the new mortgage loans granted in the first half of 2024 were concentrated in only three jurisdictions: CABA (34%), Buenos Aires (31.5%), and Córdoba (14%). In contrast, in provinces like Formosa, La Rioja, or Catamarca, the number of new loans was almost nil. These areas have lower population density and more labor informality, which strongly limits the solvent demand for this type of financing.
San Juan and Neuquén are the provinces where the number of mortgage debtors grew the most, although this also responds to the low comparison base. Salta and Santa Cruz remain in the ranking, and along with CABA, they complete the top 5 with the highest growth. Viewed from another perspective, the Buenos Aires market is the one with the highest adoption of mortgage credit, with 12.7 holders for every 10,000 adults. After CABA, the next is Córdoba with 4.4 holders per 10,000 adults, Neuquén with 3.3, and the rest with less than 3 holders for every 10,000 adults.
In summary, although progress has been made in the reactivation of the mortgage credit market, especially in the UVA modality, significant challenges persist in terms of financial inclusion and equitable access to housing financing.
What are the credit conditions for mortgages at the beginning of 2025
After several months of gradual improvement in mortgage credit conditions in Argentina, recent indicators show a change in trend. Since the third quarter of 2024, conditions began to tighten, and by the first quarter of 2025, the balance between banks that are loosening and tightening their conditions has equaled out, marking a turning point in the process of reactivating mortgage financing.
The latest data collected by the Central Bank in its Credit Conditions Survey shows that 13.3% of financial entities reported having tightened the conditions for granting mortgage credit, compared to 6.7% that declared more flexible conditions and another 6.7% that indicated moderate relaxations. The rest of the banks did not report significant changes.
UVA mortgage loans: why the middle class is starting to be left out again
The figure of 13.3% of banks that tightened their conditions constitutes the highest level of deterioration recorded since the pandemic period, highlighting the relevance of this change in the market dynamics.
The main factor cited by entities to explain the deterioration in credit conditions is the level of available liquidity. The scarcity of liquidity has been, consistently over the last nine months, the only factor on which banks agree as a central explanation for the tightening. This evidence suggests that the problem does not stem from issues of solvency or credit risk, but from structural limitations in funding capacity.
In parallel, for the first time since the beginning of the current phase of mortgage reactivation, a bank declared an expectation of a decrease in credit demand. Although this is an isolated case, the reason given is relevant: a combination of lower flow of potential clients and uncompetitive interest rates.
However, in general, banks do not anticipate a decline in the demand for mortgage loans, although there is a lower proportion of entities expecting growth in that demand compared to previous periods.
This dynamic could be explained by the fact that the current level of demand is still significant, allowing the flow of disbursements to be sustained in the short term, despite the more restrictive conditions.
The recent evolution of the Argentine mortgage market reflects a moment of transition: the exhaustion of liquidity begins to strain credit supply conditions, although demand still shows resilience. The sustainability of the mortgage recovery process will largely depend on the financial system's ability to restore its funding levels and offer conditions that are attractive to households.