Those who do not have the full amount to buy a property, which is more the norm than the exception in Argentina, are seeing a resurgence in recent months of mortgage loan offers for used or brand new homes with deeds.
But another option to access your own home is to buy the unit during its construction. or “from the well”. In this case, developers offer different types of financing. What are the available options? Is it better to borrow in pesos or dollars?
Damian Tabakmanpresident of the Chamber of Urban Developers (CEDU), describes the most widespread modality: “For the most part, developers finance in installments during the construction period with an advance payment in dollars and the remainder in installments adjusted by the Construction Index (CAC) and at the time of delivery of the unit the price is completely paid,” he describes. “For this type of purchase, it is not necessary no requirementjust pay the advance and commit to paying the installments,” he describes.
As banks do not currently finance developers to build in pits, access to housing is through mortgage loans (for finished or used units) 20 or 30 years that are adjusted in UVAs (follows inflation) with rates ranging between 5% and 7% annually.
In this modality, The requirements are banking ones: resist the Veraz, that the debtor has sufficient white income and proportional to the payment of the fee and that he pays approximately 30% of the value of the property out of his own pocket the day of signing the purchase.
Although mortgage loans have not taken off as expected so far, the analyst German Gomez Picassofrom Real Estate Report, says that People’s enthusiasm for applying for these loans is growing. And he believes that, by November and December, “we will be surprised by the number of loans in progress, even though everything is slow because the system, which is just now starting to work, has not been well-oiled,” he says.
Self-funded developers
As for the financing of developers with their own capital, according to Tabakman, “there are very few companies that do this.” For example, the option of offering Self-financing for 30 years from the wellOne of them is Juan Manuel Tapiola, CEO & founder of Spazios, which develops apartments in the northern area of Capital Federal and in the western corridor of Greater Buenos Aires.
Tapiola says that they have been financing apartments for 30 years for a decade. The method, as he describes, is the payment of a fixed advance of US$ 15,000, then installments in pesos adjusted by CAC and the possibility of ending with a “rental fee”, when the buyer already has possession of the property.
“Unlike banks, in this system, there are no requirements,” says Tapiola. The manager says that, according to a survey of his clients, Nine out of 10 would not qualify for a bank loan.”
Among the developers who work with their own financing is also the Ecipsa Group, the company chaired by Jaime Garbarsky, owner of the Natania and MilAires brands. “Two common examples are financing until delivery or post-delivery, with a 20% down payment, 40% in installments during construction and Delivery of the remaining 40% at the time of possession or up to 48 months thereafter”, they commented at the firm.
Sebastian Orlandi, director of the Flamma Group, has 80% of his projects in the San Martin and Villa Devoto neighborhoods. “The greener the work, the greater the financing,” he says. But, in general, the modality is to pay an advance of the 30% of the value of the apartment and then 60 monthly installments in pesos (CAC) or in fixed dollars (MEP), as chosen by the buyer.
Gómez Picasso warns in this regard that “today It would be more convenient if the balance was paid in pesos updated by CAC, since If the dollar remains flat, the developer runs the risk that what he collects from the fees (if they are in dollars) will not be enough to finish the work,” he says. On the other hand, It is also fairer for the buyer, adds.
In particular, Flamma has a longer-term financing for a project located in the town of San Martin, opposite UNSAM. There are two towers that are just starting up (they will be delivered in 30 months) that will include 170 units, of which 60 have already been sold.
In this case, after the 30% advance payment, 84 months are paid and 10% is paid in possession of the property. Although the company has its own financing, the key, according to Orlandi, “is the Intermediate financing from banks so that developers can offer financing for 240 months, for example (20 years). I think we are on that path.”