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Brand new apartments are sold cheaper than 4 years ago
November 25, 2023
Palermo and Belgrano R: Brand new apartments are sold cheaper than 4 years ago
They are two of the most desired neighborhoods to live in and most sought after to buy or rent properties; Their current prices are a real opportunity
Belgrano R and Palermo Soho stand out as two of the most desired neighborhoods to live in and their current prices are an attractive opportunity.
In the traditional neighborhood of Belgrano R , recognized for decades as one of the most exclusive bastions of the city of Buenos Aires, a trend is manifesting that arouses both interest and concern. Facing a persistent decline spanning four years, prices for coveted brand new apartments are 18.8% below the 2019 peak of US$4,014/m², according to data provided by Reporte Inmobiliario.
In concrete figures, the average price per square meter of the units on offer currently stands at US$3,284, reflecting a drop of 4.21% compared to US$3,428/m² the previous year. This decline marks the fourth decline since the start of the pandemic, evidencing a significant challenge for the area 's real estate market.
Belgrano R is recognized as one of the most exclusive neighborhoods in the city of Buenos Aires.
The charm of Belgrano R
Paradoxically, while brand new properties experience a constant decline in prices, imposing traditional residences, with their large gardens and swimming pools, resist the downward trend, with prices that can vary between US$500,000 and US$1,000,000. “This phenomenon, in my opinion, is due to an amalgamation of factors,” explains Martín Pinus, director of the real estate company of the same name. “From my experience, those who choose Belgrano R usually have a long-standing connection to the neighborhood or had an aspirational dream of residing there for a long time. This is the public that tends to opt for purchasing a house,” explains the expert in the area.Belgrano R, delimited by Av. Cabildo, the Mitre, Olazábal and La Pampa Railway tracks, has managed to successfully preserve its exclusivity and its distinctive style of European-inspired low-rise homes, attracting those seeking to immerse themselves in a profile characterized by traditional residences. “The owners of these emblematic houses, fully aware of the uniqueness of their product, choose to protect their values and wait for the right buyer, thus defying statistics that point to a general downward trend in prices in the sector,” says Pinus.
The distinctive feature of the neighborhood is its style of low, European-inspired homes and large groves of trees.
In contrast, brand new apartments cannot avoid the downward current of the market, a reality that is also explained by the lack of competitiveness in their prices compared to other nearby areas. In neighborhoods such as Colegiales and Villa Urquiza , the values of brand-new units range from US$2,781/m² to US$3,012/m², respectively. Furthermore, the proliferation of new projects places supply above demand in this segment of the real estate market.
Added to the decrease in the attractiveness of brand-new apartments in Belgrano R are the purchasing conditions that prevail in the majority of real estate developments in the area. “In general terms, to formalize the acquisition of a unit, an advance payment in dollars is required that is not less than 35% of the total value,” explains Germán Gómez Picasso, founder of Reporte Inmobiliario. He assures that, in some cases, this percentage reaches 50%, while in other projects payments are allowed in adjustable installments by CAC in pesos , although there are also situations in which the use of dollars is required for subsequent transactions.
Palermo Soho has the most sought-after square meter value in the city of Buenos Aires.
Palermo Soho, always growing
Contrasting with this reality is the case of Palermo Soho , which although it has experienced declines since 2020, showed signs of recovery this year. This area of the city's largest neighborhood was one of the areas that was most transformed and grew with new works in the last two decades. In addition to concentrating countless clothing, design and gastronomy retailers, the value of the square meter is positioned as one of the most sought-after in the city of Buenos Aires.With an average value of US$3,300 per square meter, 1.04% higher than the previous year, Palermo Soho recovers the value of brand-new properties after three years of declines. Although it remains 18% more affordable than four years ago, the possibility of a rebound at any time adds an element of anticipation in the market.
“Over the last year, in virtually every area we have looked at, we have seen an uptick in the housing market .” However, in the specific case of Palermo Soho, this increase could be classified as moderate, and could even be interpreted as a stabilization,” notes Gómez Picasso. This is also due to a general tendency among developers to avoid selling at current prices and some even choose to increase their rates.
The difference with the used one
The average value of units under development in Palermo Soho vs. used is now 23.13% lower.
However, when analyzing the real estate market in detail, it is revealed that the price per square meter of used properties in Palermo Soho is US$2,537, 5% lower than that recorded the previous year. This decline, more pronounced than that observed in properties under construction, suggests a worrying trend: the values of used properties are declining at a faster rate, marking a complex dynamic in the sector.
In comparative terms, the average value of units under development vs. used is now 23.13% lower, evidencing an increase in the gap compared to 18.3% last year. This phenomenon suggests that used property values are declining at a faster rate than new properties, outlining a scenario that will require careful observation in the coming months.
In the case of Belgrano R, the average value for used two-room units is US$2,496 per square meter, while last year it was US$2,688/m².
