Market Trends of Latin America Home Mortgage Finance Industry
This section covers the major market trends shaping the Latin America Home Mortgage Finance Market according to our research experts:
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.
