Prior to the crisis mortgages were indeed a firm part of Argentine society. However, part of the reason many people got hit so hard then is because mortgages could be taken in US dollars. Since it was a one-to-one culture, many people took these out and then of course with the fall of the peso, could not make their payments.
Now, mortgages are in pesos. However the limits are ridiculous -- I believe that most banks will only lend a maximum of u$s30k -- which doesn't exactly get you an apartment. this is great evidence as to the faith of banks in invesment!
Furthermore, as reported by one person above, if the interest rates have increased -- I haven't checked in ages, so can't verify -- last year at this time it was 12-18% depending on your approval rating, payment schedule, and amount withdrawn -- it is simply because the banks cannot legally suspend their lending programmes -- at least not without severe interference from government. However, one of my boyfriends co-workers said that Banco Frances is currently not approving any new applications for loans.
Soulskier -- don't deceive yourself, there is definitely a bubble to break. To think there isn't is to be naive.
You're forgetting that many people have indeed taken out credits in the last 5 years that they would not be able to pay if they lost their jobs. Furthermore, although people may be slowing on the taking out of mortgages for homes, they certainly take out prestamos for smaller items -- cars, home repairs, etc etc.
And on top of that you've obviously forgotten about the whole culture of paying in cuotas. How many people do you think really have the 10-12,000 pesos to buy those LCDs and Plasma TVs? And yet they fly off the shelves. No Argentine I know walks into a store and buys their A/Cs, refridgerators, washing machines etc in 1 payment. You can pay in cuotas for everything from underwear to groceries, to your furniture.
Furthermore you can pay for your holidays in cuotas (I know a tonne of people who have) -- I can pretty much guarantee that most of the people on the slopes this season will not have paid for their ski holiday up front.
This is where a huge portion of the country could be screwed if the economy goes to hell -- and credit cards here are just the same as at home, 21% and up for interest rates. Even in the case of a recession here their will be a large portion of the population that slips quickly behind in cuotas, that will stop buying, stop pumping money into the economy, and the entire country could quickly buckle under the weight of individual debt.
