Argentina's Mortgage Market: A New Era Under Milei

Argentina's mortgage market is reviving under President Javier Milei's pro-market reforms. Data shows a significant increase in new mortgages, particularly in Buenos Aires province. Key to sustaining this growth will be continued financial stability, reduced inflation, and confidence in exchange rate policy.

Argentina's long-dormant mortgage market is showing signs of revival, thanks to the pro-market reforms championed by libertarian President Javier Milei.

In Buenos Aires province, which houses 40% of Argentina's population, the number of new mortgages has surged, reaching the highest levels since 2018, according to the local college of notaries. Figures reported a nearly 500% increase year-on-year in February. Milei, a vigorous economist, has implemented rigorous austerity and cost-cutting measures since taking office in late 2023, bringing down inflation and fiscal deficit, while boosting investor confidence.

Guillermo Longhi, president of the Buenos Aires province notaries body, notes that initial support from public and then private banks has set the stage for this growth. Yet, the overall mortgage market remains small due to persistent inflation and currency interventions. Central bank data shows the market has grown to $2.3 billion from a previous high of $8.3 billion in 2018. Longhi emphasizes that future lending hinge on macroeconomic factors like inflation, exchange rates, and economic stability.

(With inputs from agencies.)