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The Demand for Mortgages under Macro Volatility: The Argentine Case

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  • Sebastián Auguste
  • Ricardo Bebczuk
  • Ramiro Moya

Abstract

This paper analyzes mortgage loan demand in Argentina using a new survey administered in the Buenos Aires Metropolitan Area. It is found that recurring macro volatility and violation of financial property rights have increased demand for real estate as an investment, which in turn raises house prices and makes it more difficult for consumer households to meet minimum income requirements for obtaining a mortgage. Affordability thus seems to offer a better explanation than standard supply side constraints for the small size of the mortgage market in Argentina. Overall, the findings suggest that the shallow mortgage market has not posed a major impediment to home ownership rate in Argentina and that the small (and shrinking) mortgage market has more to do with lack of demand than credit supply constraints.

Suggested Citation

  • Sebastián Auguste & Ricardo Bebczuk & Ramiro Moya, 2012. "The Demand for Mortgages under Macro Volatility: The Argentine Case," IIE, Working Papers 091, IIE, Universidad Nacional de La Plata.
    • Handle: RePEc:akh:wpaper:091
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    Cited by:

    1. Ricardo Bebczuk & Maria Lorena Garegnani, 2012. "Real State as Housing and as Financial Investment: A First Assessment for Argentina," IIE, Working Papers 095, IIE, Universidad Nacional de La Plata.

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    More about this item

    Keywords

    Housing; Mortgage market; Macro volatility; Argentina.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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