A recent report published by TOCTOC revealed new positive signs in the local real estate market. This is mainly due to the interest rate subsidy available for mortgage loans for the purchase of homes under UF 4,000. 

The report indicates that total sales of homes available for immediate delivery in the Metropolitan Region showed an increase of 29.8% in the third quarter of the year. Thus, during the first nine months of the year, 13,204 units were sold, representing an increase of 17.7% over the same period in 2024. 

The most dynamic segment of the housing market was that of units priced below UF 4,000, as a result of the aforementioned interest rate subsidy. During the third quarter of the year, 4,044 units were sold in this segment, representing 78% of total sales for that period. 

Although all this is happening in a context of high stock available for sale with immediate delivery, with 40,800 units in the Metropolitan Region, this figure shows a decrease compared to previous periods: during the second quarter, it was 42,200. 

What can we expect going forward? 

Firstly, the balance of subsidies leads us to believe that this benefit will still be available in the coming months. 

Of a total of 50,000 benefits to be awarded, 41,984 applications have been received to date, of which 22,210 have been approved, with 10,259 of these subsidies having been processed, while 14,985 are currently under review. Therefore, there are still nearly 40,000 subsidies to be processed. 

However, beyond subsidies, which are a temporary policy that has greatly helped the sector to date, there is the possibility of a scenario where rates could be structurally lower than what we have been accustomed to seeing from 2022 to today. 

Pension reform: potential impacts on the real estate market 

Law 21,735, which modifies the pension system in Chile, was enacted in March 2025 and will gradually come into effect. But how will this affect the local real estate market? 

This reform will gradually increase contributions, incorporating Social Security components and employer contributions. This will generate greater savings for individuals and, therefore, increase the assets managed by the System, which, together with a relaxation of the AFP portfolios, will increase investments in long-term assets, such as Endorsable Mortgage Bonds (MHE), Housing Leases (LH), and bank bonds, among others. 

Studies estimate that the marginal increase per year in the System's assets could be around US$5 billion, which would be mainly invested in long-term instruments, generating greater demand for investment, increasing prices, and causing spreads and long-term interest rates to fall. 

What would this mean for people?  

In practice, we could see a more normalized mortgage market, with rates that could eventually fall to lower levels. This, like the rate subsidy, would mean that the income required to take out a mortgage would decrease, allowing more people to access this type of credit and boosting sales in the real estate industry. 

 All of this context leads us to believe that perhaps the most difficult period for the real estate market may already be over, opening up interesting opportunities to invest in the sector, which are unlikely to last forever, but rather for a limited time. Because just as important as the investment thesis is the timing of the investment. As the old saying goes: "buy on rumor, sell on news." 

José Pablo González 
Portfolio Manager, Private Debt, Fynsa AGF