Argentina’s ‘Divisible Mortgages’ – A Housing Solution Stalled by Banking Hesitancy
Buenos Aires – A promising new initiative aimed at tackling Argentina’s severe housing shortage is facing an immediate hurdle. ‘Divisible mortgages,’ a novel legal framework allowing financing for properties even before construction is complete, has been met with resistance from the nation’s major banks, threatening to delay access to homeownership for millions. This is breaking news impacting the Argentine real estate market and highlighting systemic challenges within the financial sector.
What are Divisible Mortgages and Why the Initial Optimism?
Argentina has a significant housing need, with over three million homes lacking, yet mortgage credit represents a minuscule 0.2% of the country’s GDP. Divisible mortgages were designed to bridge this gap. The system allows developers to secure a general mortgage on a land or project, with buyers assuming portions of the credit as the building progresses. This innovative approach, formalized through Resolution 2/2025 in July, was initially hailed by both consumers and developers as a way to unlock early-stage real estate investment – something previously outside the reach of traditional financing.
The concept is simple: buyers begin paying for their unit while it’s being built. Once completed, the overall mortgage is “divided,” and each buyer assumes individual debt for their specific property. The government touted the scheme as offering long-term loan access comparable to finished properties, effectively lowering the barrier to entry for aspiring homeowners.
Banks Say ‘Not Now’: The Roadblocks to Implementation
However, the enthusiasm quickly faded. Leading Argentine banks have announced they won’t be offering loans under this modality, at least in the short to medium term. “It is not on the agenda, we are not going to advance,” sources within several banks confirmed to La Nación. The core issue isn’t a legal problem, but a fundamental disconnect between government policy and the risk appetite of the financial institutions.
Banks cite a lack of “anchor” for such a large outlay, and a significant risk factor. Unlike purchasing a completed property, divisible mortgages require lenders to trust not only the buyer’s creditworthiness but also the developer’s ability to successfully complete the project. This adds a layer of complexity and uncertainty that banks are currently unwilling to absorb.
The Liquidity Crunch and the Need for Securitization
Beyond project risk, Argentina’s financial system faces structural challenges. Interest rates have risen sharply, making financing more expensive, and banks are experiencing a liquidity crunch. “You cannot continue taking short deposits and lend,” explains González Rouco, a financial sector analyst. “There has to be a capital market that supports it.”
The solution, according to many industry experts, lies in securitization – a process where banks bundle loans and sell them as securities to investors. Santander Argentina recently highlighted this model, stating it allows them to share risk and free up capital for further lending. This system, common in the US and Europe, attracts institutional investors like pension funds and insurance companies, expanding access to mortgage financing. Essentially, securitization transforms illiquid assets (mortgage loans) into liquid ones, providing banks with the necessary liquidity to offer long-term loans.
A Long-Term Problem Requires a Systemic Solution
Even prominent real estate figures like Eduardo Costantini acknowledge the need for a more stable financial foundation. “Mortgages are going to depend on the financial system is anchored in the long term, and that is not being seen yet,” he stated. Isel Kiperszmid, president of developer Dypsa, agrees, calling the divisible mortgage scheme a “necessary, but not enough condition.”
The current situation underscores a critical point: while the government has created a legal pathway to increase homeownership, the success of this initiative hinges on the willingness of the banking sector to participate. Without addressing the underlying issues of liquidity, risk aversion, and the lack of a robust secondary mortgage market, the dream of affordable housing for Argentines remains, for now, largely out of reach. This situation serves as a cautionary tale for other nations considering similar innovative financing models – a strong financial infrastructure is paramount.
For readers interested in learning more about the Argentine economy and real estate market, archyde.com will continue to provide in-depth coverage and analysis. Stay tuned for updates on this developing story and explore our resources on global housing trends and financial market dynamics.
