Mortgage Credit vs. Market Reality: An Investment Opportunity

Mortgage lending is a comprehensive financial system. It only functions when long-term savings, stable bank deposits, institutional trust, and capital markets that promote the issuance of financial instruments to fund the sector are in place, supported by revolving liquidity. These conditions do not exist in Argentina.

Argentine savers traditionally keep their savings “under the mattress.” However, unlike other potential investment alternatives, purchasing real estate is the preferred destination for risk-averse savers. Property is a tangible investment whose value tends to increase over time, making it an effective hedge against inflation.

The current supply of mortgage credit is designed for a very limited segment of the population. It typically requires a 20% to 25% down payment on the property value, fully registered income equivalent to at least three times the monthly installment, loan tenors of up to five years for private lenders and up to thirty years for banks, monthly inflation indexation, and annual interest rates ranging between 9% and 17% in U.S. dollars.

In real terms, for every USD 100,000 property, a borrower must have saved at least USD 20,000 and earn approximately USD 5,000 per month. In contrast, average monthly income in Argentina ranges between USD 1,000 and USD 2,500 among households affected by the housing deficit. As a result, mortgage credit is only accessible to high-income, formally employed individuals.

Off-Plan Financing (“Pre-Construction Credit”)

There is a growing supply of so-called “off-plan” financing, typically marketed under the message of “stop renting and invest in your own home.” These schemes require an initial deposit of approximately USD 15,000 to USD 17,000 and involve assuming the developer’s execution risk. In many cases, construction timelines are extended, increasing risk exposure and ultimately pushing households back into the pool of unmet housing demand, despite the apparent affordability compared to traditional bank mortgages.

Tenants

Those seeking access to housing include young families, adults who have been renting for decades, and young professionals who have recently left their parents’ homes. They increasingly face difficulties finding well-maintained properties and affordable contracts, while being exposed to ongoing uncertainty regarding lease renewals—either due to unfavorable price adjustments or the landlord’s unwillingness to renew. These conditions are common across the majority of Argentine tenants.

In Argentina, rental prices are effectively dollar-denominated, and many contracts are informally structured in U.S. dollars. This issue is largely absent from the public policy agenda, while private initiatives are primarily approached as real estate businesses, treating housing as a financial asset rather than as a solution to a structural housing need.

The Opportunity

At Argentina Impact Fund, we understand this structural problem and clearly identify the opportunity it presents. Investing in the provision of housing for the tenant population generates stable, predictable income streams that, over time, deliver attractive returns.

The withdrawal of the national government from housing programs, combined with legislative changes and new regulatory frameworks, has opened the door for private investment in a niche that remains largely underserved. This segment has proven to be stable and exhibits the lowest default rates across the credit market. Tenants provide a constant and reliable source of liquidity. We structure a profitable market on top of a demand that already exists.