The housing deficit in Argentina isestimated to affect 6 million out of the 24 millionhouseholds nationally. Macro-economic turmoil hascontributed to this imbalance in two ways. First, thecontinuous inflation and currency depreciation made realestate a refuge investment protecting the capital value ofinvestors. Second, rapid inflation acts a strong deterrentto the provision of long term finance and in particularmortgages. The government overhauled the public housingassistance policy by launching a 2016-2019 integratedhousing and habitat plan (plan integral de vivienda yhabitat). This plan aims to stimulate the production, or toprovide one million housing solutions through two programs:a neighborhood improvement program targeting informalsettlements, and a credit-linked subsidy program, solucioncasa propria, through which up-front subsidies are grantedto first time home buyers who contract mortgages, thusleveraging the impact of public intervention with bankcredit. The broad prohibition of indexation has for a longtime stunted the provision of long term, finance. Tosuccessfully grow the mortgage market, banks need fundingand tools to manage interest rate and liquidity risks - thatis, in the absence of significant derivative markets,funding from the capital market. The eventual development ofa mortgage bond market based on housing loan portfolios,will help to increase the supply of stable long term funding instruments.
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