CARACAS: Apartment buildings are reflected in the windows of another one in the middle class neighborhood of Los Palos Grandes in Caracas.-AFP

CARACAS: Gustavo Martinez has a stable job as an engineer at an oil company in Caracas, but he can only dream of buying an apartment because Venezuela's inflation, the highest in the world, has crippled real estate financing. With banks not offering loans, would-be homeowners are expected to pay for property in a single or handful of installments, using wire transfers, checks and even briefcases full of US dollars.

The national currency, the bolivar, has lost 73 percent of its value to the dollar so far this year, and a single US dollar now costs 4 million bolivars. The greenback, though not official currency, is widely used to pay for goods and services across Venezuela and it is the only accepted means of payment in real estate transactions.

But in a country with a minimum public service wage of just $2 per month, Venezuelans often cannot afford even to rent and many young adults, including couples, end up living with their parents much longer than they had planned.

Venezuela's eye-watering inflation, hovering around 3,000 percent, means that banks are loath to risk giving out loans in bolivars. In the rare event they do, the repayment period is generally under six months.

There are no credit cards either. And in January, the government said banks could give out loans in dollars only with the permission of the Central Bank, making it a near-impossibility.

'No job pays you that'

As a result, Venezuelan banks have given out only $140 million in loans to a population of some 30 million, compared to $14 billion in loans in neighboring Colombia, which has some 50 million people.

Of the total loan amount, only $840,000 or 0.6 percent, were mortgage loans, based on official figures released in March. Economist Cesar Aristimuno told AFP this was a sharp drop from 7.2 percent in 2014, before a global crash in oil prices tanked Venezuela's economy, heavily dependent on crude exports. Martinez, the oil company engineer in Caracas, is luckier than most. After moving to the capital in January, he lived with his grandmother for a while but is now renting an apartment with his girlfriend. Martinez, 30, did not want to reveal how much he earns, but he said it is more than the average Venezuelan salary of $50 a month. Apartment rents in a modest suburb of the capital start from $150, according to realtor Carolina Quintero.

"An apartment costs about $50,000 dollars. No job pays you that," Martinez told AFP. "Much less will you be able to pay it in a single instalment." The figure he mentioned can buy a flat of about 800 square feet (74 square meters) in a middle-income neighborhood in Caracas. There are no public figures on how many Venezuelans live at home into their 30s or 40s, but it is a widely-observed phenomenon.

'Something of my own'

While buying a home remains a distant dream for most Venezuelans, the country's eager, though informal, adoption of the dollar as a shield against inflation has given the real estate sector at least a bit of a boost over the past two years. "In 2019 we grew five percent and we hope to close with more than 20 percent in 2021," says Francisco Lopez, president of the Real Estate Chamber of Venezuela.

Most transactions, explained Quintero, are conducted via transfers from foreign banks, though buyers may be required to provide a deposit of up to 20 percent in cash. A growing number of properties are being bought and sold on social media by agents who provide their own down payment options, such as requiring an initial investment of a third of the purchase price, with 11 months to pay the rest.

And of course there are the loan sharks, charging 15 percent per month in interest and demanding guarantees that can triple the amount of the loan to be paid back.

Martinez still hopes to buy "something of my own" one day, and he told AFP he was dabbling in small-scale investments as a way of saving some money. "It would have been great if there was a system of loans in dollars so that people who can afford the down payments can get credit," he said. -AFP