Fynsa
In recent months, the Chilean real estate market has begun to show clear signs of recovery. After a period marked by economic uncertainty, inflation and high interest rates, today there is a more stable scenario with positive prospects for both buyers and investors. The combination of better credit conditions, government support policies and a more accessible supply in terms of prices has restored dynamism to one of the most important sectors of the national economy.
The recovery of the dynamism of the Chilean real estate market is explained by several factors. In the first place, the gradual drop in inflation and the interest rate reduction policy of the Central Bank have driven a reactivation in demand. Mortgage rates, which had reached historically high levels in 2022 and 2023, are now showing a downward trend, allowing more families to re-evaluate the purchase of a home.
At the same time, real estate companies have adjusted their commercial strategies, offering greater payment facilities, promotions and alliances with banks to facilitate credit approval.
One of the pillars of this recovery has been a policy aimed at facilitating access to financing. In this sense, housing subsidies and state guarantees for mortgage loans have made it possible to expand opportunities for middle and emerging social sectors.
On the one hand, the State Guarantee Program for Mortgage Loans, implemented by the Ministry of Finance, has played a key role in reducing the risk for financial institutions. Thanks to this mechanism, which is focused on home purchases of less than UF 4,000, more families can access financing with lower or more flexible terms, especially those who previously did not qualify due to lack of savings or limited credit history.
The DS1 and DS19 subsidies continue to be fundamental tools for those seeking to acquire their first home, whether in projects with social integration or in private developments. This type of support not only stimulates demand, but also generates a dynamizing effect on the construction and real estate development sector, which has been reflected in the fact that in recent months the start of new construction has been progressively reactivated.
Another noteworthy phenomenon is the increase in the sale of homes with values of less than 4,000 UF, a segment that concentrates most of the housing demand in Chile. These properties have become the heart of the real estate market, both because of their accessibility and because of the financing and subsidy policies that favor them.
This segment is emerging as the driving force behind the recovery of the real estate market, not only because it represents the greatest demand, but also because it promotes greater competition among developers, improving the quality and diversity of the housing supply.
According to recent data provided by the Chilean Chamber of Construction, in the context described above, during the third quarter of the year, home purchases increased by 18% compared to the same period in the Metropolitan Region. In particular, the sale of homes of less than UF 4,000 showed an even better dynamic, with a growth of 22%, being the housing segment with the highest growth in sales, as a consequence of the subsidies granted for the purchase of this type of properties.
Compared to the information for the second quarter of the year, sales were up 21%.
In total, a total of 7,690 new homes were sold, their highest level of sales in 4 years, since the third quarter of 2021. Of these, 6,630 correspond to apartment sales and 1,060 to home sales, with increases in both segments, but being higher in the latter.
The current scenario is also attractive for those seeking to invest in real estate through financial instruments. One alternative for this are real estate private debt investment funds, which allow diversifying the portfolio and protecting against the volatility of other assets, with attractive returns and collateral.
With interest rates declining and confidence in the sector gradually returning, these funds are positioned as a good alternative to take advantage of an improvement in the industry.
José Pablo González
Portfolio Manager Private Debt Fynsa AGF
