Dominican Banking Sector Significantly Boosts Housing Access In Last Decade
- The Association of Multiple Banks of the Dominican Republic (ABA) has highlighted the pivotal role of the banking sector in reducing the housing deficit and enhancing access to decent housing. This progress, driven by Law 189-11 for Mortgage and Trust Market Development, is evident in the significant increase in housing-related financing over the last decade.
- From October 2013 to October 2023, the number of loans for home acquisition and renovation soared from 34,711 to 85,592, marking a 147% increase, or about 5,088 financings per year. In terms of the mortgage portfolio, there was impressive growth from RD$66,219Mn to RD$221,889Mn in the same period, a 235% rise. This sector's average annual growth rate of 12.9% outpaced the overall loan growth rate, with an average disbursement of approximately RD$15,567Mn annually for home purchases and renovations.
- The ABA noted improvements in financing conditions, with interest rates decreasing by 196 basis points from 12.4% to 10.5% between October 2013 and October 2023 and longer credit terms becoming increasingly available.
- These developments have positioned the banking sector as a crucial facilitator for Dominican families in acquiring and improving their homes, thereby contributing to a reduction in the housing deficit. The sector has effectively transmitted monetary policy aimed at housing solutions, leading to more loans, higher disbursement amounts, and better credit terms.
- The ABA reaffirmed its commitment to working with various entities to further reduce this deficit. Initiatives like the Happy Housing program, a public-private initiative that the banking sector support, aims to provide more accessible low-cost housing for lower-income families in the Dominican Republic. This ongoing collaboration and focus on favorable mortgage conditions continue to support an increasing number of Dominican families in achieving or improving their homeownership.
(Source: Dominican Today)