In the last fifteen years, credit for home acquisition (mortgage) or remodeling went from RD$11,830.19 million to RD$156,826.42 million.
The figure represents an accumulated increase of 1,226 % (RD$144,996.23 million), which in annual terms is equivalent to an average growth of 18.8 % (RD$9,666.42 million), according to data from the Asociación de Bancos Múltiples de la República Dominicana (ABA).
The volume of credit for the acquisition or improvement of housing, as well as the conditions under which users access them, have registered a notably positive evolution between 2006 and 2021, which shows the contribution of the banking sector to the reduction of the housing deficit in the country.
ABA numbers indicate that between 2002 and 2017, the housing deficit went from 1.4 million homes (65% of the total) to 829 thousand (26% of the total), which is equivalent to a reduction of approximately 589 thousand homes. He emphasized that during this period, more than half a million Dominican households gained access to quality housing.
“In this context, the multiple banking sector has contributed decisively to the process of reducing the housing deficit, which is reflected in the increase in the participation of mortgage loans in the total portfolio, doubling in fifteen years,” said the ABA, through an analysis of the Directorate of Economic Studies of the entity.
The association that groups multiple banks affirmed that these results are above the total portfolio which, during the same period, grew at an average annual rate of 13.7%.
He highlighted that, thanks to this dynamic, mortgage and home improvement loans increased from 7% in 2006 to 14% in 2021.
Likewise, in terms of the number of loans granted, the total number of mortgage and home improvement loans increased from 11,061 in 2006 to 70,290 in 2021, for a growth of 59,229 loans (535 %), which in annual terms is equivalent to a growth of 3,949 loans per year (13.1 %), stated the ABA in a press release.
It detailed that the interest rate has been reduced by 708 basis points since 2006, at the same time that, every day, it is more common to observe longer terms in this type of credits by the multiple banks operating in the country.
The ABA indicated that the Dominican Republic has made great progress in reducing the housing deficit, but much more work remains to be done.
Support for Dominican households will continue
The ABA indicated that, although it is true that the Dominican Republic has made great progress in reducing the housing deficit, the country still needs approximately 382,000 new homes and another 446,000 need substantial improvements in infrastructure and basic services. In this regard, he guaranteed that the multiple banks will continue to support Dominican households in their search for solutions to their housing needs.