The growth of housing credit in 2022 is due to the fact that entities place a higher average amount for each operation.
The home loan provided by the private financial sector grew 8.2% in the first four months of 2022 when compared to the same period in 2021, according to the Banco Central.
Between January and April 2022private banks, cooperatives and mutuals disbursed USD 361 million in mortgage loans to 4,918 beneficiaries.
Pichincha and Guayas are the provinces with the most entrepreneurs in the country
Banks placed 58% of the total volume of housing credit granted by the private financial sector.
The growth of this credit product in 2022 is due to the fact that entities place a higher average amount for each operation.
In the first quarter of 2022, the average amount of credit for housing granted by the private financial system it was $73,327.
what a means increase of 7.06% compared to the same period in 2021, which registered an average home loan amount of USD 68.488.
types of credit
In the country there are three types of mortgage loans that people can access:
- The first is VIS (Social Interest Housing) to buy homes from USD 24,667 to USD 75,508with a rate of up to 4,99%.
- Another option is VIP (Housing of Public Interest) for homes from USD 75,5 up to $97,078with a maximum rate of 4,99%.
- real estateto acquire real estate of any price, whose average interest rate in April 2022 it was 8.88%.
The rate of 4.99% for VIS and VIS housing in the private financial sector has a partial subsidy from the Government.
And the housing offer?
Henry Yandun, president of Constructores Positivos, explains that housing credit grows driven by a higher demand for real estate of USD 97,000 or more, who are in the real estate segment.
The real estate loan accounted for 85% of the total credit operations granted in the first quarter of 2022 by banks, cooperatives and mutuals. The remaining 15% corresponds to VIS and VIP credit.
“VIP and VIS credit should be better promoted. There are many projects available in which people can pay monthly installments similar to those of a lease”, adds Yandún.
Daniel Elmir, representative of the Elmir Real Estate Group, believes that the coronavirus pandemic Covid-19 reduced the income of the middle and lower classesso these families are not yet ready to borrow on a property.
In addition, the adequate employment levels are not yet optimalsince only three out of 10 Ecuadorians have a suitable job, that is, where they earn USD 400 or more and work 40 hours a week, says economic analyst David Castellanos.
Castellanos explains that people they don’t dare to get into debt in a house without the certainty of having a permanent job. And, on the other hand, the financial institutions analyze job stability of the person at the time of delivering this type of loan, adds the analyst.
Demand grows in March
In the first quarter of 2022, the reservations for house purchase fell 11% compared to the same period in 2021.
This is shown by the survey of the Association of Housing Real Estate Promoters of Ecuador (APIVE).
But when disaggregating the data by month, it is observed that the real estate sector registered a recovery in March 2022.
housing reservations grew 24% in March 2022 in relation to the same month of 2021.
If these figures for March 2022 are analyzed in the two main cities of the country, the housing reserve grew more in Quito (46%) than in Guayaquil (15%).
Elmir points out that the construction sector has assumed the increase in input costs so as not to transfer them to the price of housing and thus not affect the dynamism of activity in the remainder of 2022.