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Buying New Construction Property: Everything You Need to Know Before Deciding to Invest - Infobae
Source:
www.infobae.com
August 18, 2024
The recommendations of specialists to not fail in the attempt. The value per square meter rose to USD 2,300 on average. Additional expenses
By Jose Luis Cieri
A construction project in the Núñez neighborhood where there is a lot of activity in the construction of residential buildings
One of the alternatives that usually attracts those who want to buy a home and do not have all the money immediately is to buy it from scratch, that is, from the initial stage of construction. This option generally allows paying a down payment and then installments during the development of the work.
Although mortgage credit for the purchase of used and brand new units has returned, for now, sub-standard housing can only be acquired through money laundering .
Experts consider it crucial to follow certain tips to ensure a successful investment in this type of project. In the current context of the segment, there are several advantages and disadvantages:
“Positive expectations in the real estate market, driven by a favorable business climate and the deregulation of rental conditions, increase the chances of appreciation. The reappearance of better tools to finance the purchase of real estate, such as mortgage loans, reinforces this benefit,” Eduardo Bagnato , director of ventures at Toribio Achával, told Infobae .
Off-plan buying, which involves acquiring properties before they are built, has become attractive in times of recession because it offers flexible financing adapted to the progress of construction.
Construction generates a large number of jobs
Kevin Savelski , director of Grupo 8.66, told this newspaper that “investing in a well not only allows access to lower prices compared to finished properties, but also provides the opportunity to participate in the design and customization of the apartment. This strategy maximizes the return on investment and facilitates the entry of new investors into the market, ensuring that the final project meets expectations and increases its value in the market.”
Savelski explained that developers seek to finance construction with capital from early sales, which allows for attractive discounts. Also, because investors buy at an early stage, they often get higher returns in the long run, as property values tend to increase once construction is complete.
“Researching the developer’s past projects and their delivery times can provide an accurate idea of the likelihood that the project will be completed as promised,” Savelski added.
There are financing options that extend for the duration of the project, generally between 24 and 30 months, and others that have up to 60 installments, facilitating access to housing.
Furthermore, depending on the stage of the project entered, the buyer can obtain up to 30% profitability between the well value and the resale value.
A building from the demolition of the pre-existing construction to its completion takes 36 months on average.
According to Ezequiel Leibaschoff , commercial director of GCH, “Studio and one-bedroom units will be the most in demand, as they better fit the parameters of money laundering. In addition, new mortgage loans, although still in their initial phase, could further boost this segment of the market.”
“This mechanism could act as a key driver, increasing demand in a market that is already showing an upward trend in prices due to high demand and the progressive absorption of available supply. This trend is observed more strongly in strategic areas of CABA, such as Núñez, Belgrano and in the northern corridor of Greater Buenos Aires (GBA), said Leibaschoff.
www.buysellba.com
One of the crucial aspects for buyers interested in investing in low-income housing is knowledge of prices and their variation factors. In CABA, prices per square meter vary substantially depending on the demand in the areas: they range on average between USD 2,300 in less demanded areas and USD 3,400 in the most sought-after areas.
While in GBA the cost per m2 ranges between USD 2,150 per m2 on average and can rise to USD 3,200 in luxury homes.
“Building companies usually offer financing plans for the purchase of homes that include an advance payment of the value of the property, generally between 20% and 40%, followed by monthly installments that extend from 24 to 36 months. Recently, some developers are also collaborating with banks to offer broader financing alternatives, such as using the purchase-sale vouchers as a guarantee of payment,” Eduardo Bagnato added.
It is also important to consider the construction costs and the registration fee in the Property Registry.
Currently in CABA there are more than 50,000 homes under construction
To minimize risks and maximize the return on investment in a detached home, Ezequiel Leibaschoff recommended choosing projects in strategic locations with high appreciation potential. In addition, it is crucial to have adequate legal and financial advice, and to opt for flexible payment plans that align with the buyer's financial capacity.
“It is essential to define the investment objective and choose the best possible location. It is also recommended to opt for projects designed by architectural studios with a track record,” said Bagnato.
Real estate agents should review property titles, approvals and developer documentation to best support the investor.
Kevin Savelski stressed that stricter regulations and advanced technologies can make investments safer and more transparent. “We strive to comply with all regulations and ensure clear transactions, protecting the interests of our clients,” he said.
Savelski concluded: “Before committing to a financing plan, it is crucial for the buyer to assess their long-term financial capabilities and consider both the monthly payments and the final balance, as well as all the clauses and terms of the contract.”
Source:
Compra de vivienda desde el pozo: todo lo que hay que saber antes de decidirse a invertir
Las recomendaciones de especialistas para no fallar en el intento. El valor por metro cuadrado subió a USD 2.300 en promedio. Gastos adicionales
www.infobae.com
August 18, 2024
The recommendations of specialists to not fail in the attempt. The value per square meter rose to USD 2,300 on average. Additional expenses
By Jose Luis Cieri
A construction project in the Núñez neighborhood where there is a lot of activity in the construction of residential buildings
One of the alternatives that usually attracts those who want to buy a home and do not have all the money immediately is to buy it from scratch, that is, from the initial stage of construction. This option generally allows paying a down payment and then installments during the development of the work.
Although mortgage credit for the purchase of used and brand new units has returned, for now, sub-standard housing can only be acquired through money laundering .
Experts consider it crucial to follow certain tips to ensure a successful investment in this type of project. In the current context of the segment, there are several advantages and disadvantages:
Advantages
- Revaluation of the asset over time: The earlier you invest in a project, the greater the probability of obtaining a better return, due to the nature of the real estate business.
“Positive expectations in the real estate market, driven by a favorable business climate and the deregulation of rental conditions, increase the chances of appreciation. The reappearance of better tools to finance the purchase of real estate, such as mortgage loans, reinforces this benefit,” Eduardo Bagnato , director of ventures at Toribio Achával, told Infobae .
- Recovery of rental businesses: A normalization and improvement is expected in businesses related to the rental of properties, which adds value to the investment.
- Financing Opportunity: It is possible to acquire a home in a pit with financing, either through the developer, in an incipient manner with bank support, or a combination of both.
Potential disadvantages
- Increased costs: Accelerated inflation and/or exchange rate volatility could increase costs, affecting the final value of the investment.
- Delivery delays: There is a risk of delays in the agreed time, which can cause inconveniences for buyers.
- Competition with the used market: There are still opportunities in the second-hand housing market with prices, products and locations that may be more attractive than new projects. However, financing for these cases is usually limited, except for those who qualify for new mortgage loans.
Off-plan buying, which involves acquiring properties before they are built, has become attractive in times of recession because it offers flexible financing adapted to the progress of construction.
Construction generates a large number of jobs
Kevin Savelski , director of Grupo 8.66, told this newspaper that “investing in a well not only allows access to lower prices compared to finished properties, but also provides the opportunity to participate in the design and customization of the apartment. This strategy maximizes the return on investment and facilitates the entry of new investors into the market, ensuring that the final project meets expectations and increases its value in the market.”
Savelski explained that developers seek to finance construction with capital from early sales, which allows for attractive discounts. Also, because investors buy at an early stage, they often get higher returns in the long run, as property values tend to increase once construction is complete.
Challenge
However, off-the-shelf purchasing also presents challenges, the main one being the uncertainty related to project completion. It is essential to assess the developer's reputation and the financial strength of the project before making a commitment.“Researching the developer’s past projects and their delivery times can provide an accurate idea of the likelihood that the project will be completed as promised,” Savelski added.
There are financing options that extend for the duration of the project, generally between 24 and 30 months, and others that have up to 60 installments, facilitating access to housing.
Furthermore, depending on the stage of the project entered, the buyer can obtain up to 30% profitability between the well value and the resale value.
A building from the demolition of the pre-existing construction to its completion takes 36 months on average.
According to Ezequiel Leibaschoff , commercial director of GCH, “Studio and one-bedroom units will be the most in demand, as they better fit the parameters of money laundering. In addition, new mortgage loans, although still in their initial phase, could further boost this segment of the market.”
Options and sincerity
The purchase of sub-prime housing is experiencing a significant boost, especially with the expectation of the new money laundering.“This mechanism could act as a key driver, increasing demand in a market that is already showing an upward trend in prices due to high demand and the progressive absorption of available supply. This trend is observed more strongly in strategic areas of CABA, such as Núñez, Belgrano and in the northern corridor of Greater Buenos Aires (GBA), said Leibaschoff.
www.buysellba.com
One of the crucial aspects for buyers interested in investing in low-income housing is knowledge of prices and their variation factors. In CABA, prices per square meter vary substantially depending on the demand in the areas: they range on average between USD 2,300 in less demanded areas and USD 3,400 in the most sought-after areas.
While in GBA the cost per m2 ranges between USD 2,150 per m2 on average and can rise to USD 3,200 in luxury homes.
“Building companies usually offer financing plans for the purchase of homes that include an advance payment of the value of the property, generally between 20% and 40%, followed by monthly installments that extend from 24 to 36 months. Recently, some developers are also collaborating with banks to offer broader financing alternatives, such as using the purchase-sale vouchers as a guarantee of payment,” Eduardo Bagnato added.
Additional costs
Additional expenses for the purchase of a house in a well vary according to the stage: when signing the contract, the notary fee and part of the Stamp Tax are paid; when taking possession, the costs of equipping common areas; and at the deed, the balance of the Stamp Tax and the notary fees.It is also important to consider the construction costs and the registration fee in the Property Registry.
Currently in CABA there are more than 50,000 homes under construction
To minimize risks and maximize the return on investment in a detached home, Ezequiel Leibaschoff recommended choosing projects in strategic locations with high appreciation potential. In addition, it is crucial to have adequate legal and financial advice, and to opt for flexible payment plans that align with the buyer's financial capacity.
“It is essential to define the investment objective and choose the best possible location. It is also recommended to opt for projects designed by architectural studios with a track record,” said Bagnato.
Real estate agents should review property titles, approvals and developer documentation to best support the investor.
Kevin Savelski stressed that stricter regulations and advanced technologies can make investments safer and more transparent. “We strive to comply with all regulations and ensure clear transactions, protecting the interests of our clients,” he said.
Staggered
The plans include staggered payments spread throughout the construction process. A common option is the 30/70 plan, where 30% of the value of the property is paid upon signing the contract and the remaining 70% in installments during construction or upon completion of the project.Savelski concluded: “Before committing to a financing plan, it is crucial for the buyer to assess their long-term financial capabilities and consider both the monthly payments and the final balance, as well as all the clauses and terms of the contract.”
