Caracas (AFP)

Gustavo Martinez is an engineer in an oil company in Caracas but despite his above-average salary he cannot access property.

Hyperinflation in Venezuela has completely dried up mortgage credit.

Dizzying inflation, which is around 3,000%, prevents banks from granting loans in bolivar, the local currency.

In the rare case that they do, the repayment period is usually less than six months.

The bolivar has lost another 73% of its value against the dollar since the start of the year.

At the beginning of September, a single US dollar is equivalent to 4 million bolivars.

Therefore, the dollar, although not the official currency but which is widely used in daily life, rules in real estate transactions.

Homeowners must therefore arrange to pay by bank transfer or in cash with briefcases filled with greenbacks.

Bank lending is virtually at a standstill in Venezuela where banks have only $ 140 million in loans outstanding for a population of some 30 million, against 14 billion in neighboring Colombia and its 50 million. residents.

Bolivar banknotes, August 5, 2021 in Catia, near Caracas, Venezuela Federico PARRA AFP

The amount of mortgage loans is only $ 840,000, or 0.6% of all loans in Venezuela, according to official figures released in March.

In 2014, before the global collapse in oil prices that plunged Venezuela's economy heavily dependent on crude exports, the proportion of mortgage loans to all loans was 7.2%, according to the economist. Cesar Aristimuno.

- Distant dream -

But in a country where the minimum wage in the civil service is only $ 2 a month, home ownership is only a distant dream for many young Venezuelans who often do not even have the means. to rent accommodation.

They end up living with their parents, often as a couple, much longer than they expected.

There are no official statistics on the number of Venezuelans who live with their parents until the age of 30 or 40, but it is a widely observed phenomenon.

View of the city of Caracas in September 2019 Matias Delacroix AFP / Archives

Gustavo Martinez, the 30-year-old engineer, is luckier than most.

After moving to the capital in January, he lived with his grandmother before renting an apartment with his girlfriend.

He does not want to reveal how much he earns, but assures that it is above the Venezuelan average salary of $ 50 a month and rents in a modest suburb of the capital start at $ 150, according to real estate agent Carolina Quintero.

"An apartment costs around $ 50,000. No job can afford that," Martinez told AFP.

"And even less if it is necessary to take out this sum in cash".

With $ 50,000 you can afford an apartment of about 70 square meters in a middle-income neighborhood of Caracas.

- "Something mine" -

The country's forced adoption, albeit informal, of the dollar as a shield against inflation, however, has given the real estate sector a little boost.

“In 2019, we saw a five percent growth in transactions and we hope to close 2021 with a + 20%,” says Francisco Lopez, president of the Real Estate Chamber of Venezuela.

Real estate agent Carolina Quintero explains that most transactions are done through transfers from foreign banks, often with a 20% cash deposit.

Real estate agent Carolina Quintero during an interview at her home on August 30, 2021 in Caracas, Venezuela Yuri CORTEZ AFP

With this situation, a parallel credit market has emerged with lenders offering loans at prohibitive costs (around 15% monthly interest) and guarantees of up to three times the desired amount.

Gustavo Martinez hopes that one day he will be able to buy "something of mine" and has already started to save.

“It would have been great if there was a dollar loan system so people who can afford to make payments could get credit,” he says.

But the Venezuelan government is doing everything to discourage banks from granting it and require prior consent, which cannot be obtained, from the central bank.

© 2021 AFP