Latin America Home Mortgage Finance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

Latin America Home Mortgage Finance Market has generated a revenue of USD 55 Billion in the current year and is poised to achieve a CAGR of 3% for the forecast period.

Latin America's mortgage credit is expanding quite quickly, despite starting from a poor basis. Even though the evidence at hand suggests that dangers are not imminent, vulnerabilities can appear suddenly. Because of this, nations in the area must take prompt action to fill in information gaps and improve oversight of the housing industry. A secured loan, such as a home mortgage finance market, enables borrowing by offering the lender or bank a tangible asset as security, like a house or commercial property. Up until you pay back the debt, the bank or lender retains the asset. A home mortgage is a loan taken out to purchase a home. Finance for housing is a wise investment. Finance for housing is a wise investment. An instrument with two levels of operation. the mortgage enables families with modest incomes to buy homes that serve as both a shelter and a home and a physical asset that is frequently a primary means of saving and investing. Generally, housing finance produces economic expansion by raising employment, investment, and savings, and building a sound financial foundation.

The COVID-19 epidemic has caused a collapse in worldwide activity and is the biggest economic shock the world has experienced in decades. However, there are indications that global activity is stabilizing and that it has resumed in several significant emerging markets and developing economies. Growth in the housing sector was severely hampered by the Covid-19 pandemic and is unlikely to pick up until the economy starts to mend. Loan stress will increase, especially for loans for affordable homes. The findings demonstrate that the pandemic's detrimental effects on the housing market are mostly shown in the volume and geography of house transactions, with little effect on housing prices. The housing market is negatively impacted by the reported COVID-19 cases in the short term, but this effect gradually fades away.

In numerous nations, including Brazil, Mexico, South Africa, Botswana, Namibia, Kenya, Zambia, and Mauritius, pension asset-backed housing financing has so gained popularity recently. Even though this advancement in housing finance makes it possible to use pension funds as security for mortgages instead of real estate, lenders still have difficulty determining prospective homeowners' creditworthiness. The difficulty arises from the fact that credit information systems are still in their infancy. Thus, there is a growing need for alternate information sources for the creation of credit information systems that can determine a potential borrower's creditworthiness.

Latin America Home Mortgage Finance Market Trends

Increase in Economic Growth and GDP per capita

In Latin America, the cost of financing is very less as compared to the other countries. Latin American financing has the advantage that the associated expenses are sometimes much cheaper than anticipated. Many applicants anticipate they will pay high monthly costs or high application fees since lending limits are less stringent. The contrary, however, might be true in practice. Most banks benefit from lower operating costs in Latin America because of the region's generally lower cost of living. This translates into reasonable fees that can help you save money month after month when passed on to the bank's clients and borrowers. The lower cost of living and lower cost of financing is driving the market of home finance.

Launch of Plans by Government to Support Home Buyers in Colombia

The building sector in Colombia is driving the nation's post-pandemic economic recovery. Utilizing incentives and subsidies on both the demand side and the supply side, the Colombian government has tried to stimulate this industry, particularly in the residential sector.

On the supply side, incentives have been offered to builders in the form of income tax exemptions on loan proceeds for the construction of social or priority housing (vivienda de interés social - VIS-) and VAT refunds on building supplies for such housing (vivienda de interés prioritario - VIP-). On the supply side, the Colombian government has historically promoted supply by offering direct subsidies; they have since increased in response to the pandemic and have been expanded to include both purchasers of more expensive housing as well as those of social or priority housing.

Due to the widespread use of real estate trust mechanisms in the development and construction of building projects, Colombia offers a fairly flexible market that is proving safe for investors with regard to financing sources for construction in all segments (consisting of residential, retail, offices, and logistics parks). Companies authorised and regulated by the Colombian Financial Supervisory Authority, trustee companies are in charge of managing them.

Latin America Home Mortgage Finance Market Competitor Analysis

The Latin America Home Mortgage Finance Market is growing and highly competitive across different countries like Brazil, Columbia, and Peru of Latin America offering a huge number of competitive players dominating the market. The major players which are dominating the home mortgage finance market in Latin America are listed below.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support