According to the Wall Street Journal,Mexico’s government-run mortgage institute Infonavit issued 578,396 loans in 2012,up 16 percent on the year,with 25 percent of the loans going toward home renovations and the rest to fund new Mexico real estate transactions. According to the article,this far surpassed the institute’s goal of 490,000 loans for 2012,amounting to more than $12.6 billion.
“For the 2013-2017 period,the government firm predicts it will supply 2.37 million mortgages for a broader economic impact of around MXN1 trillion,” writes the WSJ. “In addition to issuing credit,Infonavit has established targets to make housing more environmentally friendly,promoting developments with sustainable elements such as solar energy and prioritizing projects closer to city centers.”
Mexico’s newly elected president Enrique Peña Nieto has vowed to continue the federal government’s recent housing push,which includes allowing borrowers to use funds to renovate existing properties. According to the WSJ,loans granted by Infonavit have contributed significantly to a rise in home ownership in Mexico and have also had a strong positive impact on the entire home building industry throughout the country during the last two presidential administrations.
“Home sales are expected to increase penetration of Infonavit’s total loans for housing,reaching 35 percent by the end of 2013,Fitch Ratings said in a December report,” writes the WSJ. “Infonavit loans account for five out of every seven mortgage loans granted in Mexico each year.”
The growing number of mortgage loans in Mexico is yet another sign that real estate transactions in Latin America’s second largest economy are also on a sharp rise,showing no signs of slowing down in the coming months and years. As with any solid investment opportunity now is the best time to buy,as prices will continue to increase along with demand.