Miguel Kiguel, economist: “Mortgage credits can take off quickly, all that is needed is political will and money”

The dream of widespread homeownership in Argentina remains elusive, hampered by a persistent structural deficit in the mortgage credit system. While stakeholders universally acknowledge that "mortgage credit is social justice," the reality on the ground is that the market struggles to gain traction. The core issue isn't a lack of demand or prohibitive interest rates, but rather a fundamental mismatch: banks, reliant on short-term deposits, cannot sustainably offer the 20- or 30-year loans required for mortgages.

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Mortgage credit is social justice.

This bottleneck was a central theme at the 10th Construction Congress, where economist Miguel Kiguel and Damián Tabakman, president of the Chamber of Urban Developers (CEDU), discussed the challenges. Tabakman highlighted the soaring construction costs in dollar terms, which have not been matched by rising property prices, thus eroding profitability. Kiguel, however, presented a potentially game-changing solution: leveraging the nation's existing assets.

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The banks do not have the means to lend for 20 or 30 years when their funding depends on 30-day deposits.

Kiguel proposes tapping into the Sustainability Guarantee Fund (FGS), which holds approximately $70 billion in assets, including $11 billion in publicly traded stocks. He argues that instead of letting these funds lie dormant, they should be "put to work" to finance the economy, specifically the mortgage sector. This approach, he believes, requires not complex new mechanisms but a decisive political will to utilize existing resources.

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The problem is not new, but the solution is not either.

From an Argentine perspective, the conversation around mortgage credit is deeply intertwined with social equity and economic development. While international observers might see this as a purely financial issue, for us, it's about enabling access to housing, a cornerstone of stability and upward mobility. Kiguel's proposal to utilize the FGS is particularly resonant because it speaks to a desire to harness national resources for national benefit. The emphasis on a UVA-based system, despite its past volatility, reflects a pragmatic understanding that indexing to inflation is a necessary evil in our economic reality, a way to make long-term lending feasible when currency stability is a constant challenge. This isn't just about building houses; it's about building a more secure future for Argentinians.

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The market operates in pesos, and for mortgages to do so as well, they must operate in that currency.