How is the real estate sector in Mexico being impacted by the pandemic?

In the realm of housing, most companies engaged in construction manage smaller projects and often face challenges in securing financial backing. As the largest financial institution operating in Latin America’s real estate sector, we are inclined towards fostering collaboration with highly innovative companies. The pandemic has triggered two prominent issues. Initially, with people confined due to lockdowns, prospective homebuyers find themselves unable to explore housing options, creating a demand-supply imbalance. Consequently, several construction projects have been paused. However, if economic reactivation is initiated by June, there’s a possibility of restoring equilibrium between supply and demand. Despite the pandemic, we remain committed to processing mortgage loans and are accepting mortgage requests. During this health crisis, Infonavit’s focus remains on showcasing its supportive role. Being responsible for seven out of 10 loans in Mexico, we safeguard the interests of private sector employees. For instance, we’re providing a three-month moratorium for clients experiencing salary reductions and deferring certain obligatory payments companies owe to Infonavit. As we approach the end of May, particularly in June and July, we anticipate witnessing a resurgence in the real estate sector, with an upsurge in loan applications.

What factors will contribute to the sector’s recovery by June?

The pivotal factor in reviving the sector lies in people returning to their jobs. Revitalizing employment is the key to stimulating consumption, which, in turn, impacts Infonavit’s operations since our services cater to individuals employed in the formal sector. Unfortunately, we aren’t equipped to assist workers engaged in informal employment.

How are your 2020 objectives being adjusted?

Our goals remain unaltered. Despite the circumstances, our aim to approve 500,000 loans stands firm. In fact, we’re introducing new financial services anticipating increased demand for housing loans. Recognizing that many individuals will require funds to purchase homes, we’re bolstering our cash flow for mortgage approvals. We’re launching products designed to aid home refurbishments and planning the release of a new financing line by August. In regions like Guanajuato or Michoacán, where families possess substantial land holdings, we intend to assist in their land development through our loan facilities. Diversifying our financial services will redefine our portfolio distribution, aligning with our existing goals.

How do you unite loans to finance collective ventures?

Introduced in February 2020, our “Let’s Unite Credits” product facilitates the consolidation of loans from various individuals. This innovative feature allows couples, friends, or relatives to combine their loans for acquiring larger properties. Additionally, this service accommodates cases where unmarried cohabiting couples encounter loan acquisition challenges. The variability in construction sector regulations across Mexican municipalities poses hurdles, and we strive to address these disparities by adapting our products accordingly.

How can flexibility be enhanced within the construction process?

Mexico’s construction regulations vary significantly among municipalities, with some areas operating under outdated laws. Reducing bureaucratic obstacles and streamlining the construction process is critical. While we’ve initiated conversations with municipalities, the diversity of regulations persists across Mexico’s 2,500 municipalities, necessitating broader efforts to standardize and modernize regulations.

What objectives do you have for 2020 and beyond?

Our primary objective is to extend 3 million mortgage loans, aiming to alleviate the prevalent housing deficit. Our focus is on offering access to new homes, striving to support individuals in need. With a client base of 5.5 million, last year we issued approximately a million credits, including some under less favorable terms for families. Our commitment involves providing sustainable, realistic loans that align with the evolving needs of Mexican society.