Reactivation of Uva Mortgage Loans: What Are the Sector's Expectations

The reactivation of UVA mortgage loans marked a turning point in the real estate market in 2024, with more than 11,000 loans granted and an average amount of USD 75,000 per beneficiary. This is the best performance since 2018, according to an analysis by the Urban Fabric Foundation.

Although the rebound occurred from very low levels, the recovery of mortgage activity in the second half of the year left important lessons for its future sustainability.

Factors driving the recovery

Macroeconomic stability and lower demand for financing from the State allowed banks to offer these credit lines again. Additionally, the prior knowledge of the UVA system by financial entities and borrowers facilitated its adoption.

According to the Urban Fabric Foundation, "during the first six months, mortgage activity was practically nil", while in the second half there was sustained growth. The executive director of the organization, Fernando Álvarez de Celis, highlighted to Infobae that "a significant learning curve was not necessary", which accelerated the implementation of UVA loans in this new stage.

Impact on the real estate market

The rebound in loans had a direct impact on property demand and the number of transactions completed. In December 2024, deeds increased by 68% year-on-year, reaching the highest level of real estate activity in seven years.

Despite the increase in operations, prices remained relatively stable, except in areas with high specific demand. According to Álvarez de Celis, the capital whitening also contributed to the consolidation of the sector.

Profile of loan borrowers

Access to financing was facilitated for those with prior savings. The majority of buyers who accessed UVA mortgage loans had at least 30% of the property's value in their own funds, which allowed them to meet bank requirements and cover additional purchase costs.

The most demanded properties through this modality were:

• Studios for less than USD 60,000
• Two-room apartments for under USD 80,000
• Three-room houses for less than USD 100,000

These properties concentrated the largest number of operations, especially in the City of Buenos Aires and the province of Buenos Aires.

Outlook for the sector

Although the recovery of UVA mortgage loans is encouraging, some challenges persist. Since the last quarter of 2024, banks began to gradually adjust interest rates, which could affect the demand for these loans in the medium term.

In this regard, Álvarez de Celis stated that the securitization of loans could be key to ensuring their continuity, allowing banks to transfer their portfolios to entities specialized in long-term loans.

Meanwhile, real estate specialist Lisandro Cuello pointed out that, although activity slowed slightly in recent months due to seasonality, demand is expected to rebound after March, with the economic reactivation of the first quarter.