Saturday, April 28, 2012

The coming Mexican housing boom: Are the banks eyeing Mexico?


Mexico's inflation subsiding to just 3.7% and a more stable banking environment will allow the country's largest mortgage provider to offer fixed-rate loans for the first time in June. The state-controlled Infonavit will offer 30-year mortgages to homeowners and plans to issue mortgage-backed securities (MBS) in pesos next year.

Mexico enjoys the second lowest inflation rate in Latin American and real interest rates, the benchmark lending rate minus inflation, is just 0.77% compared to 3.76% in Brazil.

Bloomberg reports that the lender has made about 4.4 million loans since 2001 and estimates a national housing shortage affecting more than 8.9 million families.

The current government, as well as leading candidates in this year's presidential race, all support policies to increase the country's supply of housing. Banks are looking to housing as a growth opportunity, with outstanding housing loans increasing 16% in January over the last twelve months

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