By Luc Cohen
BUENOS AIRES, Dec 30 (Reuters) - Argentina's real estate sector is preparing for a development boom spurred by a successful tax amnesty program and an expected revival in mortgage lending, potentially prompting a rebound in construction jobs and boosting bank loans.
Both would be welcome in an economy that remains in recession one year after market-friendly President Mauricio Macri took office after more than a decade of populist rule led to a slowdown in real estate activity.
"We still lack a stable economy, but if inflation falls next year, that widens the possibilities of developing the mortgage market," said Alfredo Blanco, an economist at the University of Cordoba, adding that more demand for housing would boost the economy. "Construction is the mother of all industries."
Real estate activity started to pick up in 2015, as Argentines sensed that currency controls put in place by the previous administration, limiting access to U.S. dollars, would be lifted, said Carlos Allende, president of Argentina's College of Notaries.
Now, a tax amnesty program that allows Argentines to declare previously hidden wealth has spurred additional demand, as Argentines look to park newly declared cash in safe-haven properties.
Program participants can avoid paying a fee if they invest their money in real estate development funds. Argentina's largest developers including Consultatio SA and IRSA Propiedades Comerciales SA have launched funds, hoping to raise tens of millions.
'DEMAND BOOM'
The residential sector is ripe for a "demand boom," since the value of mortgage loans as a percentage of the economy is below its historical norm and below that of regional peers, said Christian Lopez, chief executive of Consultatio's asset management division.
Mortgage are less common than elsewhere in Latin America because of a history of high inflation, leaving Argentines leery of adjustable-rate mortgages and resulting in expensive fixed-rate mortgages. Inflation is seen ending 2016 at 40 percent, but economists expect it to fall to around 20 percent next year.
Mortgage loans as a percentage of GDP were lower in Argentina in 2015 than in far poorer countries like Haiti, Paraguay and Guatemala, according to data from the Washington, D.C.-based Housing Finance Information Network, a think tank.
Nearly 34,000 deeds for home purchases and sales in Buenos Aires were notarized during the first ten months of 2016, 12 percent more than last year and the highest since 2012, College of Notaries data show. Of those, 12.8 percent were purchased with mortgages, up from 11.2 percent last year.