Thus, between January and May, banks disbursed a total of 16,086 mortgages, according to statistics from the Superintendence of Banking, Insurance and AFPs (SBS). This figure denotes a decrease of 11.5% compared to that registered in the same period last year (18,183), which reverses the growing trend observed until 2021.
A decrease in the number of mortgages delivered has not been observed in the last two years, or since the beginning of the pandemic
“The placement of new mortgages has dropped considerably in this first part of the year; historically we had always had an increase in these months, but this time we have had a reduction”, said Management a banking source.
Cost
One of the main factors that explains the slowdown in mortgages is the increase shown in recent months in the cost of home financing, linked to the rise in interest rates on government bonds (sovereign, long-term) and of the reference rate of the Central Reserve Bank (BCR), said experts in the sector.
Thus, the annual average interest rate for mortgage loans in national currency granted by banks increased 38.2% in the last 12 months. According to SBS statistics, this rate went from a historical low of 5.87%, reported on June 30, 2021, to the current 8.11%.
A higher interest rate translates into higher monthly mortgage payments, which means that some people now no longer qualify for credit because they do not have sufficient payment capacity, said Álvaro Puga, general manager of Bengala Inmobiliaria.
direct effect
“The increases that the interest rate may have have a direct effect on the mortgage payment. Then, the credit becomes more expensive with respect to the monthly payment capacity and the total payment capacity of the financing”, agreed in mentioning the executive of the financial sector.
Compared to a year ago, the monthly installment of mortgage loans has increased on average, between 8% and 10%, the interviewees estimated.
That is, if before the fee was S/ 3,000, now to access that same credit the person requesting it must have the ability to pay S/ 3,300 each month.
rising inflation
This scenario is made more complicated for people by another increasingly adverse factor, which is rising inflation (the accumulated rate at 12 months climbed to 8.81%, according to INEI).
“Inflation also reduces people’s ability to borrow,” emphasized Puga.
As the prices of the products rise, the expenses of the families increase, so they have less disposable income for the payment of debts, the financial source referred.
He added that the deterioration of formal employment also explains the lower delivery of mortgages so far this year.
Expectations
For Puga, the deterioration of expectations about the growth of the economy, as a result of greater local and international political uncertainty, discourages the demand for mortgage loans, which are long-term investments for families.
Although the number of mortgages decreased, the total balance of mortgage loans in the financial system grew 8.1% year-on-year at the end of May, according to data from the BCR.
This would imply that the mortgages placed now are of greater amount, said Puga.
And it is that the price of some houses has risen due to the increase in the cost of construction materials, complemented the source of the banking sector.
Trend would continue in the short term
In the next three months, the placement of new mortgages will continue to slow down, since local and international uncertainty is not expected to dissipate, and because interest rates will continue to rise hand in hand with the decisions of the US Fed and the BCR, said a manager of the financial system.
Added to this is that interest rates have also increased for financing real estate developers themselves. “The search for new land is proving complex because prices have not dropped despite the fact that there are fewer projects,” said Álvaro Puga, from Bengala Inmobiliaria.
However, he maintained that there will be a housing demand that will not be speculative but out of necessity, and estimated that there will be purchase opportunities in the Mivivienda segment and in the socioeconomic sectors B- and C+. “There will be demand for mortgages for homes with prices between S/ 250,000 and S/ 750,000”, considered a banking source.