SANTO DOMINGO.– The Dominican Republic's Multiple Banking Association (ABA) said yesterday that the mortgage loan portfolio increased by RD$35,944 million last year, which represents a 19% increase in relative terms, going from RD$190,596 million in 2022 to RD$226,541 million at the close of 2023.
The additional funds were channeled through 9,347 new loans, meaning that the same number of homes were purchased. It was noted that these transactions doubled compared to 2022, a period in which loans for new home purchases reached approximately 4,500, according to a report from the ABA's Technical Directorate.
The association detailed that mortgage loans were distributed as follows: acquisition of the debtor's home RD$188,153 million (83%); purchase of low-cost housing from a trust RD$24,999 million (11%); acquisition of a second home or vacation home RD$10,341 million (4.5%) and in remodeling and construction of homes RD$3,048 million (1.5%).
In a press release, he highlighted that the banking sector is currently the main provider of these resources, considering that the funds it allocates for home acquisition represent 65.8% of the total mortgage portfolio of the financial system.
The ABA highlighted that the loan portfolio of multiple banks to the construction sector increased by RD$30,118 million, equivalent to 44%, rising from RD$67,759 million in 2022 to RD$97,877 million at the end of 2023, the report stated
He explained that this increase was driven by the banks' own funds and the reserve requirements released by monetary authorities to stimulate the construction sector. He specified that this growth was channeled through 2,059 new loans, out of a total of 18,481 outstanding loans at the end of 2023.
He highlighted that, on the supply side, multiple banks account for 82.8% of the funds contributed to construction financing, according to data from the Superintendency of Banks.
He indicated that this type of financing, also called interim financing, is granted to construction companies to acquire materials, pay for labor, and cover other expenses related to the building or project. He explained that its distinguishing feature is that it is disbursed gradually based on progress payments, that is, as the work advances.
The banking sector emphasized that this process allows for maintaining the supply of new properties for the public, which can be for housing, commercial or other uses.
The ABA reiterated the commitment of multiple banks to continue contributing to the construction, acquisition and remodeling of homes for clients, through financing and initiatives such as the Happy Housing program, due to its impact on reducing the housing deficit, on the quality of life of citizens and due to the multiplier effect of this economic activity in other productive sectors.
