First-Time Homeowners Buenos Aires Real Estate Buyer Market
The Buenos Aires Housing Institute (El Instituto de Vivienda) is working together with Banco Ciudad to launch an exciting new financial scheme that will help young people get their foot on the property ladder.
Buying property in Argentina, especially in Buenos Aires, has always been a problem for potential homeowners and the economy. A myriad of factors have made it extremely difficult for Argentines and foreigners to purchase a property in Argentina. The pesos dropping value against the US dollar has meant that property prices edge away from the buying capacity of people’s wages. Plus, the boom in the Buenos Aires property market has meant that every year property prices creep up. And to make things more difficult for first-time buyers, there are very few credit schemes to assist buyers. It goes to show how difficult it is to apply for a mortgage here when only 5% of real estate deals are paid for through mortgage schemes.
In order to combat the problem and democratise, to some extent, the real estate buyer market, the government institute of housing will launch in May 2012 a new program that offers mortgages at a rate much lower than what banks are currently offering. The idea behind the mortgages is that they pay a much lower monthly rate than with other pay monthly credit schemes: these monthly rates are similar to rental rates so it’s much more manageable.
The Buenos Aires real estate market will in turn benefit from this mortgage scheme and experts predict that the increase in buyers will encourage growth in the construction market. The brains behind this more egalitarian mortgage system took inspiration from similar successful programs in Chile, Brazil and Colombia.
In order to access these low-rate mortgages, buyers have to pay for 15% of the property’s value but they pay for the rest of its value in monthly instalments over a period of 20 years. Upon signing the broker’s papers, buyers have to pay for 30% of the property’s value (15% from buyer 15% from mortgages scheme). Looking set to help thousands of young home buyers through a three pronged credit scheme (pre-saving, direct loan and long term mortgage payments) the housing institute of Buenos Aires will provide $ 1000 million pesos in its first year.
Properties that come under this scheme have to be located within Buenos Aires city limits and they cannot be valued over $ 1700 dollars per m2 for used property or over $ 2000 dollars for new property. Both Argentine nationals and foreigners (who have been living in Buenos Aires for a minimum of 2 years) can access these government assisted mortgages.
This new scheme should help to democratise the Buenos Aires real estate market and boost the construction market: something crucial in the current economic climate.
Go back to Argentina Real Estate News:
Argentina Real Estate Trusts - Investments in Construction at Cost in Argentina
Small Apartment units in Buenos Aires attract Real Estate Investors
BUENOS AIRES HABITAT a pioneer of the extended stay hotel-style apartment concept in Buenos Aires. Offers luxurious furnished apartments in Buenos Aires for temporary rent as an alternative to high-class hotels. Whether your visit is for a few days or a few months, for vacation or business trip, we will make your Buenos Aires experience memorable. All of our Buenos Aires apartments offer high-speed internet access, cable TV and housekeeping service.