BCRP: mortgage loans rose 5.3% in August led by loans in national currency

by time news

2024-09-30 17:40:51

The GDP of the construction sector shows signs of recovery, registering a growth of 4.8% until August 2024. Credits: Publication

In August, mortgage credit in Peru showed a noticeable increase of 5.3% compared to the same month of the previous year, reaching a total balance of S/68.801 millionreported the Central Reserve Bank of Peru (BCRP).

This growth was mainly driven by home loans, which increased by 6.3% a year, according to recent data.

In monthly terms, mortgage credit also registered an increase, although more modest, of 0.4% compared to July. This monthly increase is favored by a 0.5% increase in loans issued in soles.

The preference for borrowing in local currency for acquiring real estate remains strong. In August, only 7 out of every 100 mortgage loans were given in dollars, while the rest were given in soles.

This practice helps reduce the risk of Changes in the exchange rate negatively affect households that receive these types of loans.

The speed of mortgage credit in the national currency reflects the growing confidence in the local economy and the preference to avoid the risks associated with exchange rate fluctuations.

Also, the article of the higher distribution explains, the behavior of mortgage loans is important to understand the dynamics of the real estate and the financial market in the country.

BCRP: mortgage loans rose 5.3% in August led by loans in national currencyThe construction sector is recovering again in Peru, confirms BCRP. Credits: REUTERS/Mariana Bazo/File Photo

The average rental rate in Peru has remained stable over the past seven years, with a monthly average of US$15.8 per square meter until the second quarter of 2024, according to the Peruvian Construction Company (Capeco).

However, Mortgage loans issued with resources from the MiVivienda Fund may fall to the lowest level since 2009reported something similar.

A recent analysis by Capeco indicates that, if the trend of the last six months continues, the number of loans distributed with resources from the MiVivienda Fund could reach 6,948 in 2024.

If the average of the last five years is taken as a reference, the figure could reach 8,179. In either of the two scenarios, the housing loans issued by the State this year will not exceed the 8,456 issued in 2010, which will represent the worst recession in fifteen years.

In 2009, only 4,810 credits were transferred, a very low baseline scenario. This decrease in mortgage loans shows a worrying trend for the population that faces problems finding a good home.

The MiVivienda Fund, administered by the Ministry of Housing, Construction and Sanitation (MVCS), has been an important tool in facilitating access to housing for many Peruvians. However, the reduction in the number of loans offered could have a significant impact on the construction sector and the economy in general.

From the perspective of the construction team, The stability in rental prices does not compensate for the decrease in mortgage loans. Lack of access to finance for home purchases can lead to an increase in rental demand, which can put upward pressure on rental prices.

Construction needs to grow at rates greater than 7% each year, to reduce infrastructure, equipment and housing deficits, according to Capeco. Credit: RemembranceConstruction needs to grow at rates greater than 7% each year, to reduce infrastructure, equipment and housing deficits, according to Capeco. Credit: Remembrance

Capeco has reported that the GDP of the construction sector has shown signs of recoveryRegistering a growth of 4.8% until August 2024. This progress is mainly due to the increase in public works by 20.1%.

BCR estimates that the construction sector will close the year with a growth of 3.2%. This number is considered possible by the construction team, given the nature of the sector until August.

However, private statistics indicate a slightly higher growth, of 3.7%, based on the work of public-private partnerships (PPP), working for taxes, mining investment and the sale of non-social housing .

The increase in public services has been a decisive factor in the recovery of the sector to reverse the negative trend that has been observed. Also, the sale of non-social housing has contributed to a more optimistic outlook.

Public works continue to power the construction sector, but big incentives are needed for the private sector, according to Capeco. Credit: RemembrancePublic works continue to power the construction sector, but big incentives are needed for the private sector, according to Capeco. Credit: Remembrance

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