Housing credit reaches 2.93% of GDP in 2025 and marks its highest level in the last decade

The increased weight of housing credit within GDP demonstrates a gradual process of institutionalization, banking and maturation of the Paraguayan real estate market.

Banco Central del Paraguay

Housing finance in Paraguay continues to consolidate a growth trend that transcends mere circumstance and is beginning to outline a structural change at the core of the local financial system. As of the end of December 2025, the total outstanding balance of housing loans granted by banks and finance companies reached G. 9,529,796,000,000. Expressed in US dollars at the official exchange rate of G. 6,585.55, this figure is equivalent to approximately USD 1.447 billion, a number that, due to its magnitude and relative weight within the economy, represents the highest level in recent years.

This growth is neither isolated nor sudden. In December 2019, the total outstanding balance of housing loans stood at G. 3.33 trillion. By 2022, it had reached G. 5.63 trillion. In 2023, it rose to G. 6.70 trillion, and in 2024, it closed at G. 7.74 trillion. The 2025 figure represents a year-on-year nominal increase of nearly 23% compared to the previous year, confirming that the dynamism of mortgage lending not only held steady but accelerated within a context of increased real estate activity and macroeconomic stabilization.

However, the most insightful data point is not the absolute amount, but its relationship to Gross Domestic Product. In 2019, housing credit represented just 1.36% of Paraguay's GDP. By 2022, that proportion had climbed to 1.84%. In 2023, it stood at 2.14%. In 2024, it reached 2.22%. By the end of 2025, housing finance was equivalent to 2.93% of GDP, marking the highest level of the observed period and demonstrating a sustained process of financial deepening.

This increase of more than 1.5 percentage points of GDP over six years is significant. It implies that the financial system is allocating a growing proportion of resources to housing finance, suggesting greater formalization of the residential market, increased access to banking services for buyers, and greater confidence among financial institutions in the sector's stability.

Even so, from a comparative perspective, Paraguay continues to show a low level of mortgage penetration compared to other countries in the region, where housing credit can easily exceed 10% of GDP and, in more developed economies, reach considerably higher figures. This reveals a dual interpretation: on the one hand, the recent expansion is significant and positive; on the other, the potential for structural growth is still substantial.

The composition of financing also offers relevant elements for analysis. Of the total recorded in December 2025, 9.45 trillion guaraníes correspond to banks, while finance companies account for only 73.001 billion guaraníes. The share of finance companies, which exceeded 112 billion guaraníes in 2022, has progressively decreased in both absolute and relative terms. The growth of mortgage lending in Paraguay is being driven almost exclusively by the banking system, which reinforces the idea of greater institutionalization of housing finance.

This banking dominance not only reflects greater funding capacity and risk structure, but also increasing professionalization in credit evaluation, mortgage structuring, and the integration of financing within the real estate value chain. For developers, this implies the need to structure projects with greater predictability, formality, and bankability, as access to credit for end buyers becomes a central component of absorption.

The macroeconomic context is key to interpreting this trajectory. In recent years, Paraguay has maintained relative stability in inflation, fiscal discipline, and regulatory predictability—factors that constitute the structural support for long-term credit. Mortgage financing is, by definition, an intertemporal decision for both the bank and the borrower; it requires confidence in income stability, currency stability, and the institutional framework. The increased share of housing credit in GDP suggests that these elements have been sufficiently robust to allow for expansion.

At the same time, credit growth is also linked to the dynamics of the formal real estate sector, which in recent years has shown greater sophistication in project design, more robust financial structuring, and a more tailored offering for bankable segments. The consolidation of developments geared toward buyers with access to the financial system, the expansion of residential projects in strategic urban areas, and increasing professionalization in the market have all contributed to expanding the demand for financing.

However, the current level of 2.93% of GDP also raises strategic questions going forward. The challenge is not only to continue expanding the volume of credit, but to do so with portfolio quality, adequate risk management, and progressively expanding access without generating over-indebtedness or price bubbles. Regional experience shows that mortgage expansion is a powerful engine of urban development and economic growth, but it requires a balance between dynamism and prudence.

From a real estate market perspective, increased access to credit has direct implications for project structure. As mortgage financing gains ground, the rate of absorption tends to depend less exclusively on pre-sales or investor buyers and more on the financed end buyer. This alters the business logic, the product profile, and the pricing strategy. Bankability ceases to be an accessory aspect and becomes a central element of project design.

The growth observed between 2019 and 2025 reflects a cumulative trend that has persisted even in contexts of external volatility. If macroeconomic stability is maintained and the financial system upholds credit discipline, housing credit could continue to increase its share of GDP in the coming years.