Home ownership: in Argentina, it takes more than 14 years of income to own a home

RIO DE JANEIRO, BRAZIL – According to a series of recent surveys carried out in the local real estate market, it takes the full salaries of more than 14 years of work to have access to an apartment of approximately 40 m2, the average size among the most sought-after surfaces as a first home.

The data comes from the last report made by the specialized site Reporte Inmobiliario. This problem in the access to owning a house has three fundamental axes, which interact with each other within the framework of the Argentine economy.

These three variables directly influence the loss of purchasing power in workers’ income; the lack of mortgage loans and the level of interest rates; and course, the dollar, since all the scaffolding of the real estate market translates into prices according to the foreign currency.

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LOSS OF PURCHASING POWER

Year after year, salaried workers see how their income has decreased, which arises between the lack of updating of salaries and the increase in the cost of living. This process occurs in parallel and continuously; that is, a lethal combo is produced that threatens the idea of ​​access to the first house.

According to data from the Employment and Business Dynamics Observatory (OEDE) of the National Ministry of Labor, a registered worker with a net income of $100,000 must collect 14.2 years of income to be able to access the purchase of a two-room apartment of 42 m2 of around US$80,000 in the city of Buenos Aires.

This means that an employee must allocate 14 full years of his income to have his own home. And not only that: the OEDE survey highlights another no less important fact: today, 13.6% more income must be used compared to May 2021.

Therefore, two more should be added with respect to the previous measurement to reach the goal of owning a home. Purchasing power deteriorates in Argentina as the years go by.

MORTGAGE LOANS, THE GREAT ABSENTEES

This fundamental tool for access to housing seems stagnant in Argentina, its presence almost null. Today, the market options are few and far between for an average earner who decides to buy a home.

According to the report, in 2021, a credit to access a two-room apartment demanded a fee whose value was around $87,000.

The great absentees in this scenario are, without a doubt, the banks. The offer is low, and the requirements often generate more rejection than sympathy when planning the purchase of a home.

The survey takes Banco Nación as a test case, which was not strong in its intervention in offering options to buyers.

According to data from the report, the initial fee to finance 80% of the value of a used two-room apartment would amount to $114,727.

In other words, to support that month-to-month quota, the worker would have to demonstrate a gross income of $458,908, which is equivalent to more than four average registered incomes.