BuySellBA
Administrator
End of the currency controls: What will happen to property prices, sales, and construction costs? - La Nacion Propiedades
Source:
www.lanacion.com.ar
April 14, 2025
The experts answer a key question: Could a currency adjustment lower real estate values?
By Carla Quiroga
The real estate market is preparing to consolidate its growthSantiago Filipuzzi
The lifting of the currency controls is providing hope for a real estate market experiencing a period of "green shoots ." For 35 months, property sales transactions in the city of Buenos Aires have been growing, and demand confirms the listing prices. Properties located in the city of Buenos Aires registered a year-on-year increase of 8.8% in March 2025 compared to the same month last year , the largest year-on-year increase since November 2018, according to the latest report from Zonaprop.
Furthermore, 94% more deeds were signed in February than in the same month in 2024: it was the second-best month of the year in 18 months in the city of Buenos Aires. "The real estate market had been factoring in the lifting of the restrictions , but when it would happen was creating uncertainty ," explains Fabián Achával of the eponymous real estate agency.
The leaders assure that the end of the restrictions is a turning point.Santiago Filipuzzi
Daniel Salaya Romera, director of the company that bears his name, explains that it is a market that remained partially contained by expectations of devaluation . He asserts that the persistent decline in reserves in recent weeks—with a net negative balance estimated at approximately US$6.1 billion— the uncertainty surrounding the approval of the agreement with the IMF , and the unprecedented global crisis triggered by the tariff hike announced by President Donald Trump added pressure and uncertainty to an already complex situation for emerging markets.
Now, the picture is different . Salaya Romera speaks of the international black swan and the local opportunity. "With the 'firepower' represented by the reserves arriving on Tuesday, along with fiscal discipline and the surplus, it seems that this time when the world catches a cold, Argentina won't catch pneumonia ," he enthuses.
Domingo Speranza, president of the real estate services company Newmark, insists that "we cannot ignore the global context of uncertainty and how durable goods are outperforming stocks and becoming an even stronger safe haven in economies like ours."
Despite the optimism, real estate market leaders are realistic and expect an initial, short-term cooling effect due to the uncertainty that dollar movements always generate in real estate transactions .
But once the variables are accommodated, they expect an acceleration and consolidation of growth . The market is in a transition in which the cost (almost 100% from October 2023) and the number of transactions (96% February versus February) have increased, but not prices to the same extent, not even in that of financial assets, which have risen 50% in the last 12 months, analyzes Gonzalo de la Serna, CEO of Consultatio, adding that “this price catch-up needs a driver , and this news of greater certainty in the exchange rate and access to the purchase of dollars for individuals may be what determines the definitive reversal in the rise in real estate prices .”
"This is a market driven by expectations , and investors were waiting for signs that the recovery will deepen ," anticipates Gabriela Goldszer, director of Ocampo Properties.
One fact that could justify this forecast is that, if we analyze the historical data, an economy without currency controls has 54% more real estate transactions than one with restrictions on access to the dollar. However, this figure does not mean that transactions will also grow by 50%. "It was already recovering, which is why we are estimating a 20% increase in transactions. In other words, we could close the year with 65,000 sales in the city of Buenos Aires, 10,000 more than last year," Achával explains.
Getting out of the restrictions is the pending milestone for the economy to take off and grow . “This means more jobs, more consumption, more demand, more money,” says Federico González Rouco, an economist specializing in housing and part of the team at Empiria, Hernán Lacunza’s consulting firm. “It’s a turning point , and for the first time in years, the sector can once again plan with clearer rules and more predictability,” agrees Mali Vázquez, executive director of the Chamber of Urban Developers (CEDU).
There may be a cooling off due to the uncertainty that dollar movements always generate in real estate transactions. But once the variables are adjusted, they expect an acceleration and consolidation of growth.Ricardo Pristupluk
In other words, they agree that Argentina is on its way to becoming a more credible country . "This reality will help attract investment and access to debt markets," explains economic analyst Darío Rubinsztein. He clarifies that this means more dollars will flow into the country, which " will kick-start the Argentine economy , in all aspects, including the real estate sector."
The challenge now is to adapt quickly to this scenario, with a more open country, free access, and greater transparency throughout the supply chain . "We lived for years with restrictions, distortions, and structural barriers that created an invisible barrier to the already intense, risky, and capital-intensive activity of construction," reflects Santiago Tarasido, CEO of the construction company Criba, who is convinced that the focus should now be on efficiency.
Salaya Romera agrees, stating that if the value of the free dollar is around last Friday's closing price, that is, 23% above the official dollar on the same day, this will generate "certainty for UVA (peso) loans already granted but not yet registered."
In other words, the ceiling established in the exchange rate band generates concrete relief because the pesos of the credit will be enough to complete the operation .
Those who are paying off a loan must make a different analysis because, since the payments are adjusted for inflation, if the exchange rate adjustment impacts inflation and continues to rise in April, UVA payments will become more expensive.
Furthermore, broker Fabián Achával warns that the bulk of mortgage transactions we see are being closed with "old" rates and a dollar at $1,200 due to the delay in the lending process. This means that these two negative impacts have not yet been felt: "The rate hike and the jump in the exchange rate in recent weeks . "
These numbers put the latest projections of 26.6% inflation for the year, as predicted by the LatinFocus report—produced before the announcement of the lifting of the currency controls and the March inflation figure—far behind.
That projection is difficult to meet because over nine months, inflation should not increase more than 1.8% to 2% per month.
Specialists say that those who were on the path to qualifying for a loan will not have problems.Freepik
Leandro Molina, director of Zonaprop, acknowledges that with these numbers, the challenge is for "financing lines to evolve toward more balanced systems , capable of mitigating the risks inherent in persistent inflation and the mismatch between wages and real estate values."
In terms of numbers, the specter of a currency adjustment affecting prices is part of the scenario. However, economists don't seem worried about the impact a rise in the dollar could have on inflation. "It will be an inflationary surge ," said economist Hernán Lacunza on the program hosted by José del Río, which airs on the LN+ channel.
"That's a short-term effect. The lifting of the currency controls makes property purchases less cumbersome. It also allows for the entry of foreign currency into the country, meaning more dollars into the economy, and will boost foreign investment," says economist Juan Manuel Telechea.
Ultimately, in a market where real estate is valued in dollars —despite the fact that it is not exportable, a paradox in Argentina—availability and certainty will have very concrete effects on the real estate sector.
On the other hand, the historical link between agricultural profitability and real estate investment bodes well . Therefore, "the liquidation of agricultural exports, and a new, clearer exchange rate context, could be channeled into real estate investment—both in land and urban properties—generating a virtuous cycle for the sector," says Salaya Romera.
Fabián Achával adds that the elimination of the dollar blend —which allowed 80% of foreign currency from exports to be settled at the official dollar and the remaining 20% at the financial dollar—will incentivize exporters to settle, while importers will have no incentive to advance their payments. "This will generate foreign currency, which will stabilize the exchange rate ," he states.
In short, active demand, owners reluctant to accept aggressive counteroffers, record supply absorption, and delayed values are the variables that predict there is no room for prices to fall, especially since in four years, between 2019 and 2023, they fell 24% and only recovered between 8% and 10%. In other words, they are still delayed.
Real estate price readjustments are a trend. Listing prices on Zonaprop and Mercado Libre have risen for 14 consecutive months, with year-over-year increases . Radar Inmobiliario's survey shares another indicator that supports the "no decline": closing prices increased by almost 12% in 2024—more than listing prices— with negotiation rates currently below those of 2019 and around 5%, declining even further for lower-priced properties. "Even with the increase, prices in real terms are at 2006 levels," says Achával.
Looking ahead, Fabián Narváez, owner of the real estate agency of the same name, clarifies that "a price increase of between 5% and 6% was expected in 2025. This measure will accelerate this increase, albeit slightly, improving the sales pace." However, he clarifies that he doesn't expect the effects to occur "overnight."
Martín Pinus, from the real estate agency that bears his name and specializes in premium properties, acknowledges that "premium buyers were already able to look beyond the macroeconomic situation" and anticipates that "this will be the segment that will benefit the most, especially those in good locations." " Recoleta, Palermo, Belgrano, and Núñez are neighborhoods that always react well to positive market changes," explains Lisandro de Achával, director of Achával Cornejo.
Diego Cazes, director of LJ Ramos, adds that the capital is now once again a sought-after area, so "values are rising, even more than in the northern zone ." In numbers: the latest report from Zonaprop shows that in the northern zone, values rose 3.8% in the last 12 months, while in CABA, prices increased 8.1% in the same period, almost double.
Brokers agree that property prices will not fallDaniel Basualdo
Returning to the analysis of the macroeconomic impact on real estate, it's important to understand that devaluations don't necessarily cause property prices to plummet . If we analyze what happened with the 2018 devaluation during Mauricio Macri's administration, when demand contracted, prices fell only 2% on average.
The explanation is that there's no bubble in the sector, nor are there indebted owners needing to offload their properties. It's in the Argentine DNA to keep their savings in real estate, and if they don't need to sell, they wait for the bull market .
The linear explanation is that, on the one hand, there is a huge demand that grew very quickly, and on the other, funding mortgage loans is expensive for banks that need tools such as portfolio titling or securitization , and large investors, such as retirement funds or pension insurance companies, to sustain it over the long term. This is a key point in achieving a drop in rates that currently hover between 5.5% and 9% .
However, the key to consolidating the mortgage market is the recovery of purchasing power, because demand for loans depends on disposable income. Without an improvement in income, access to credit remains limited for many families.
The end of the currency controls will facilitate real estate transactions.Canva
Between September 2024 and February 2025, loan payments increased by 15.9% . Leandro Molina, of Zonaprop, acknowledges that even in an environment of greater confidence and access to credit, salary increases are unlikely to keep pace with rising property values, deepening market segmentation . “More than inflation, people are analyzing whether their salary will be able to pay the installment,” insists González Rouco. He explains that, in 2018, during the Macri administration, lending slowed due to devaluation, not inflation.
In numbers, the purchasing power of salaries measured in dollars , as analyzed by Radar Inmobiliario, is one of the most relevant indicators for explaining the dynamics of real estate prices and the impact of UVA loans.
The report indicates that purchasing a 60 m² apartment required an effort equal to 136.2 salaries in January, 41.6% less than a year earlier . This figure is still lower than the figure reached between 2012 and 2019, when the effort was around 141 salaries. However, it is far from the average recorded during the UVA loan boom of 2017-2018, when it stood at 110 salaries.
However, the increase in construction costs in dollars over the last year and a half is one of the sector's Achilles' heels and perhaps the point generating the most uncertainty. This cost has accumulated a 107% increase since October 2023 and 52.7% if we analyze only 2024, according to data from Zonaprop. This surge in costs has complicated the financial plans of developers who negotiated land in exchange for square footage that is now more expensive.
Boquete believes that adjusting the official dollar to a value similar to the cash settlement could lower it and make units in the pipeline or under construction more competitive . Carlos Spina, director of Argencons, the developer behind the Quartier brand, agrees with this view: "If this slight exchange rate correction doesn't generate pass-through —inflation and its transfer to prices— the pipeline values will approach those used, and the construction industry will be reactivated ," he analyzes, emphasizing the need to implement intermediate credit for the purchase of new or under-construction apartments. "Uncertainty always slows down, but certainty improves. If the turbulence passes and the value of the dollar stabilizes, demand will be reactivated."
Tarasido, from Criba, acknowledges that while " Argentines are accustomed to operating in crisis situations ," there is a deeper issue: the housing shortage in Argentina exceeds 3.5 million, but the focus is on the AAA market for the simple reason that it is built for those who can pay "almost in cash." Therefore, he acknowledges that "the arrival of intermediate credit offers the possibility of expanding the offering to other segments. The challenge is how to quickly impact new developments and not just the existing stock."
Increases in wages for construction workers impacted the increase in the cost in dollars RICARDO PRISTUPLUK
“When the dollar rises, operations slow down, but the counterpart decreases construction costs, which provides relief for developers,” analyzes Miguel Ludmer, president of Interwin. He explains that the opposite situation arose last year when the dollar hit $1,200 and costs rose 100% in one year due to inflation. “This scenario drove up the value of existing units because they are based on replacement costs—how much it will cost to build the same square meter,” he adds.
Gerardo Azcuy, head of the eponymous development company with eight projects underway, explains that in a context of sky-high inflation and a stable dollar, " wages have recovered sharply over the last 15 months, making construction costs more expensive in dollars. Meanwhile, materials and equipment, which had risen sharply due to coverage, are beginning to adjust downwards," he analyzes.
However, it provides a surprising fact: during these turbulent months, the market has strongly supported this industry, producing record sales not seen in many years . Azcuy explains this by a new, positive business climate, unlocking pent-up demand that is being channeled into closing deals, accompanied by a consensus that prices per square meter will recover strongly in the coming months.
CEDU is also optimistic: "If the opening of the foreign exchange market is accompanied by lower inflation and competitiveness in inputs, it can significantly improve the cost equation for developers," says Vázquez.
Along the same lines, Narváez adds that "the proposed change creates greater predictability, thus improving planning and reducing costs."
Now, the key to understanding what's coming is to analyze the dollar's evolution in relation to inflation: if the latter increases at a moderate pace but below the exchange rate adjustment, there will still be a gap, and building will be expensive in dollars. If inflation increases at the same rate, the gap will also be expensive, because the cost of construction in US dollars is lagging. "The only way to correct this would be for the dollar to rise faster than inflation ," summarizes Germán Gómez Picasso, director of Reporte Inmobiliario.
“There are sectors of the economy, such as mining, that were waiting for the currency controls to be lifted to invest. In the case of real estate, there is no such rush, but it is a very small sector with enormous growth potential, and in which the elimination of the exchange restriction could pave the way for that path,” adds González Rouco. Martín Boquete, of Toribio Achaval, clarifies that, while the lifting of the currency controls is an important step, “ Argentina's institutional image in the world is key to ensuring that the economic rules will be maintained in the future .”
Spina believes many are waiting for "the midterm elections and for the plan to be consolidated."
Reducing country risk will also be key as a magnet. "It should be around 300-350 basis points, a distant goal," Salaya Romera quantifies, affirming that institutional or private funds from abroad that anticipate will be the big winners . The reason? Properties in Argentina are "cheap" not only compared to the rest of the world but also to the region.
The latest Latin American real estate survey (RIAL), conducted jointly by Di Tella and Zonaprop, shows that with an average value of US$2,450/m², Buenos Aires ranks fourth in the ranking of the most expensive cities . Montevideo leads the way with US$3,454/m² per square meter, followed by Mexico City (US$2,706/m²) and Monterrey, also in Mexico (US$2,561/m²).
It's worth noting that recently there's been a growing interest from foreigners in purchasing property in the country . In fact, a few days ago, at the launch of a US$75 million investment project in the heart of Palermo , Chinese funds were commenting on the interest in local real estate. "They say they see Argentina as the China of the 1980s," the businessmen stated.
They're also looking at concrete opportunities. The developers of the Palermo-based project acknowledged that Venezuelans, Americans, and Indians had purchased the highest-priced units, which cost around US$650,000 .
This will be the first project that the Brazilian group Safra undertakes in the country.Gentleness
And as if that weren't enough, a few days ago, the Brazilian group Safra, one of the main players in that country's market, announced its first project in Argentina: a US$200 million tower designed by Norman Foster in the Catalinas area.
www.buysellba.com
Source:
Cuánto costarán las propiedades sin el cepo cambiario
Los referentes responden una pregunta clave: ¿Un ajuste cambiario podría bajar los valores de los inmuebles?
www.lanacion.com.ar
April 14, 2025
The experts answer a key question: Could a currency adjustment lower real estate values?
By Carla Quiroga
The real estate market is preparing to consolidate its growthSantiago Filipuzzi
The lifting of the currency controls is providing hope for a real estate market experiencing a period of "green shoots ." For 35 months, property sales transactions in the city of Buenos Aires have been growing, and demand confirms the listing prices. Properties located in the city of Buenos Aires registered a year-on-year increase of 8.8% in March 2025 compared to the same month last year , the largest year-on-year increase since November 2018, according to the latest report from Zonaprop.
Furthermore, 94% more deeds were signed in February than in the same month in 2024: it was the second-best month of the year in 18 months in the city of Buenos Aires. "The real estate market had been factoring in the lifting of the restrictions , but when it would happen was creating uncertainty ," explains Fabián Achával of the eponymous real estate agency.
The leaders assure that the end of the restrictions is a turning point.Santiago Filipuzzi
Daniel Salaya Romera, director of the company that bears his name, explains that it is a market that remained partially contained by expectations of devaluation . He asserts that the persistent decline in reserves in recent weeks—with a net negative balance estimated at approximately US$6.1 billion— the uncertainty surrounding the approval of the agreement with the IMF , and the unprecedented global crisis triggered by the tariff hike announced by President Donald Trump added pressure and uncertainty to an already complex situation for emerging markets.
Now, the picture is different . Salaya Romera speaks of the international black swan and the local opportunity. "With the 'firepower' represented by the reserves arriving on Tuesday, along with fiscal discipline and the surplus, it seems that this time when the world catches a cold, Argentina won't catch pneumonia ," he enthuses.
Domingo Speranza, president of the real estate services company Newmark, insists that "we cannot ignore the global context of uncertainty and how durable goods are outperforming stocks and becoming an even stronger safe haven in economies like ours."
Despite the optimism, real estate market leaders are realistic and expect an initial, short-term cooling effect due to the uncertainty that dollar movements always generate in real estate transactions .
But once the variables are accommodated, they expect an acceleration and consolidation of growth . The market is in a transition in which the cost (almost 100% from October 2023) and the number of transactions (96% February versus February) have increased, but not prices to the same extent, not even in that of financial assets, which have risen 50% in the last 12 months, analyzes Gonzalo de la Serna, CEO of Consultatio, adding that “this price catch-up needs a driver , and this news of greater certainty in the exchange rate and access to the purchase of dollars for individuals may be what determines the definitive reversal in the rise in real estate prices .”
"This is a market driven by expectations , and investors were waiting for signs that the recovery will deepen ," anticipates Gabriela Goldszer, director of Ocampo Properties.
One fact that could justify this forecast is that, if we analyze the historical data, an economy without currency controls has 54% more real estate transactions than one with restrictions on access to the dollar. However, this figure does not mean that transactions will also grow by 50%. "It was already recovering, which is why we are estimating a 20% increase in transactions. In other words, we could close the year with 65,000 sales in the city of Buenos Aires, 10,000 more than last year," Achával explains.
The perfect combo in a present with a “tailwind”
If things go well, the combination is almost perfect: good prospects, certainty, exchange rate stability, credit, and still-low prices, which are recovering from mid-2023 . "All real estate cycles didn't start with credit, but with the lifting of the restrictions," says real estate market analyst Daniel Bryn.Getting out of the restrictions is the pending milestone for the economy to take off and grow . “This means more jobs, more consumption, more demand, more money,” says Federico González Rouco, an economist specializing in housing and part of the team at Empiria, Hernán Lacunza’s consulting firm. “It’s a turning point , and for the first time in years, the sector can once again plan with clearer rules and more predictability,” agrees Mali Vázquez, executive director of the Chamber of Urban Developers (CEDU).
There may be a cooling off due to the uncertainty that dollar movements always generate in real estate transactions. But once the variables are adjusted, they expect an acceleration and consolidation of growth.Ricardo Pristupluk
In other words, they agree that Argentina is on its way to becoming a more credible country . "This reality will help attract investment and access to debt markets," explains economic analyst Darío Rubinsztein. He clarifies that this means more dollars will flow into the country, which " will kick-start the Argentine economy , in all aspects, including the real estate sector."
The challenge now is to adapt quickly to this scenario, with a more open country, free access, and greater transparency throughout the supply chain . "We lived for years with restrictions, distortions, and structural barriers that created an invisible barrier to the already intense, risky, and capital-intensive activity of construction," reflects Santiago Tarasido, CEO of the construction company Criba, who is convinced that the focus should now be on efficiency.
How could this new scenario affect mortgage loans?
"From now on, they will operate with the official dollar, not with the MEP," clarifies González Rouco. However, while he says it's premature to conduct an analysis, he assures that he doesn't imagine "a chaotic situation" for the exchange rate. " The MEP—which was the dollar used to compare the UVA, the unit of credit—was already above $1,300 ," he explains.Salaya Romera agrees, stating that if the value of the free dollar is around last Friday's closing price, that is, 23% above the official dollar on the same day, this will generate "certainty for UVA (peso) loans already granted but not yet registered."
In other words, the ceiling established in the exchange rate band generates concrete relief because the pesos of the credit will be enough to complete the operation .
Those who are paying off a loan must make a different analysis because, since the payments are adjusted for inflation, if the exchange rate adjustment impacts inflation and continues to rise in April, UVA payments will become more expensive.
Furthermore, broker Fabián Achával warns that the bulk of mortgage transactions we see are being closed with "old" rates and a dollar at $1,200 due to the delay in the lending process. This means that these two negative impacts have not yet been felt: "The rate hike and the jump in the exchange rate in recent weeks . "
The impact of inflation on credits
The Friday of hyperactivity surprised with March inflation, which closed at 3.7% . And if we take the three months of 2025 into account, it accumulates an increase of 8.6% and 55.9% year-over-year, according to INDEC.These numbers put the latest projections of 26.6% inflation for the year, as predicted by the LatinFocus report—produced before the announcement of the lifting of the currency controls and the March inflation figure—far behind.
That projection is difficult to meet because over nine months, inflation should not increase more than 1.8% to 2% per month.
Specialists say that those who were on the path to qualifying for a loan will not have problems.Freepik
Leandro Molina, director of Zonaprop, acknowledges that with these numbers, the challenge is for "financing lines to evolve toward more balanced systems , capable of mitigating the risks inherent in persistent inflation and the mismatch between wages and real estate values."
In terms of numbers, the specter of a currency adjustment affecting prices is part of the scenario. However, economists don't seem worried about the impact a rise in the dollar could have on inflation. "It will be an inflationary surge ," said economist Hernán Lacunza on the program hosted by José del Río, which airs on the LN+ channel.
"That's a short-term effect. The lifting of the currency controls makes property purchases less cumbersome. It also allows for the entry of foreign currency into the country, meaning more dollars into the economy, and will boost foreign investment," says economist Juan Manuel Telechea.
Ultimately, in a market where real estate is valued in dollars —despite the fact that it is not exportable, a paradox in Argentina—availability and certainty will have very concrete effects on the real estate sector.
The end of the restrictions and its effects on the market
1) Sales and property prices will increase
An economy without exchange controls always has a higher volume of activity than one with currency controls. This is even more so in a sector that operates in dollars. "In used goods, transactions showed an active demand that used the dollar as its currency and didn't consider the dollar's value or its fluctuations," explains Martín Boquete, director of Toribio Achaval.On the other hand, the historical link between agricultural profitability and real estate investment bodes well . Therefore, "the liquidation of agricultural exports, and a new, clearer exchange rate context, could be channeled into real estate investment—both in land and urban properties—generating a virtuous cycle for the sector," says Salaya Romera.
Fabián Achával adds that the elimination of the dollar blend —which allowed 80% of foreign currency from exports to be settled at the official dollar and the remaining 20% at the financial dollar—will incentivize exporters to settle, while importers will have no incentive to advance their payments. "This will generate foreign currency, which will stabilize the exchange rate ," he states.
In short, active demand, owners reluctant to accept aggressive counteroffers, record supply absorption, and delayed values are the variables that predict there is no room for prices to fall, especially since in four years, between 2019 and 2023, they fell 24% and only recovered between 8% and 10%. In other words, they are still delayed.
Real estate price readjustments are a trend. Listing prices on Zonaprop and Mercado Libre have risen for 14 consecutive months, with year-over-year increases . Radar Inmobiliario's survey shares another indicator that supports the "no decline": closing prices increased by almost 12% in 2024—more than listing prices— with negotiation rates currently below those of 2019 and around 5%, declining even further for lower-priced properties. "Even with the increase, prices in real terms are at 2006 levels," says Achával.
Looking ahead, Fabián Narváez, owner of the real estate agency of the same name, clarifies that "a price increase of between 5% and 6% was expected in 2025. This measure will accelerate this increase, albeit slightly, improving the sales pace." However, he clarifies that he doesn't expect the effects to occur "overnight."
Martín Pinus, from the real estate agency that bears his name and specializes in premium properties, acknowledges that "premium buyers were already able to look beyond the macroeconomic situation" and anticipates that "this will be the segment that will benefit the most, especially those in good locations." " Recoleta, Palermo, Belgrano, and Núñez are neighborhoods that always react well to positive market changes," explains Lisandro de Achával, director of Achával Cornejo.
Diego Cazes, director of LJ Ramos, adds that the capital is now once again a sought-after area, so "values are rising, even more than in the northern zone ." In numbers: the latest report from Zonaprop shows that in the northern zone, values rose 3.8% in the last 12 months, while in CABA, prices increased 8.1% in the same period, almost double.
Brokers agree that property prices will not fallDaniel Basualdo
Returning to the analysis of the macroeconomic impact on real estate, it's important to understand that devaluations don't necessarily cause property prices to plummet . If we analyze what happened with the 2018 devaluation during Mauricio Macri's administration, when demand contracted, prices fell only 2% on average.
The explanation is that there's no bubble in the sector, nor are there indebted owners needing to offload their properties. It's in the Argentine DNA to keep their savings in real estate, and if they don't need to sell, they wait for the bull market .
2) There will be more mortgage credit offers
Although the mortgage lending market in the country began operating a year ago, and today 20% of real estate transactions are carried out with mortgages, the local financial system needs more to sustain and strengthen itself . It's no coincidence that in recent months, 12 of the 24 banks offering credit lines have raised interest rates.The linear explanation is that, on the one hand, there is a huge demand that grew very quickly, and on the other, funding mortgage loans is expensive for banks that need tools such as portfolio titling or securitization , and large investors, such as retirement funds or pension insurance companies, to sustain it over the long term. This is a key point in achieving a drop in rates that currently hover between 5.5% and 9% .
3) The number of people buying with a mortgage will increase.
The macroeconomic framework, with low inflation and a stable exchange rate, creates predictability for the coming years, making anyone interested in borrowing more willing to do so.However, the key to consolidating the mortgage market is the recovery of purchasing power, because demand for loans depends on disposable income. Without an improvement in income, access to credit remains limited for many families.
The end of the currency controls will facilitate real estate transactions.Canva
Between September 2024 and February 2025, loan payments increased by 15.9% . Leandro Molina, of Zonaprop, acknowledges that even in an environment of greater confidence and access to credit, salary increases are unlikely to keep pace with rising property values, deepening market segmentation . “More than inflation, people are analyzing whether their salary will be able to pay the installment,” insists González Rouco. He explains that, in 2018, during the Macri administration, lending slowed due to devaluation, not inflation.
In numbers, the purchasing power of salaries measured in dollars , as analyzed by Radar Inmobiliario, is one of the most relevant indicators for explaining the dynamics of real estate prices and the impact of UVA loans.
The report indicates that purchasing a 60 m² apartment required an effort equal to 136.2 salaries in January, 41.6% less than a year earlier . This figure is still lower than the figure reached between 2012 and 2019, when the effort was around 141 salaries. However, it is far from the average recorded during the UVA loan boom of 2017-2018, when it stood at 110 salaries.
4) The construction cost, in dollars, could be adjusted
Real estate developments take between three and six years of work, and most often begin with one set of economic rules and end with another. In this sense, macroeconomic stability is always good news.However, the increase in construction costs in dollars over the last year and a half is one of the sector's Achilles' heels and perhaps the point generating the most uncertainty. This cost has accumulated a 107% increase since October 2023 and 52.7% if we analyze only 2024, according to data from Zonaprop. This surge in costs has complicated the financial plans of developers who negotiated land in exchange for square footage that is now more expensive.
Boquete believes that adjusting the official dollar to a value similar to the cash settlement could lower it and make units in the pipeline or under construction more competitive . Carlos Spina, director of Argencons, the developer behind the Quartier brand, agrees with this view: "If this slight exchange rate correction doesn't generate pass-through —inflation and its transfer to prices— the pipeline values will approach those used, and the construction industry will be reactivated ," he analyzes, emphasizing the need to implement intermediate credit for the purchase of new or under-construction apartments. "Uncertainty always slows down, but certainty improves. If the turbulence passes and the value of the dollar stabilizes, demand will be reactivated."
Tarasido, from Criba, acknowledges that while " Argentines are accustomed to operating in crisis situations ," there is a deeper issue: the housing shortage in Argentina exceeds 3.5 million, but the focus is on the AAA market for the simple reason that it is built for those who can pay "almost in cash." Therefore, he acknowledges that "the arrival of intermediate credit offers the possibility of expanding the offering to other segments. The challenge is how to quickly impact new developments and not just the existing stock."
Increases in wages for construction workers impacted the increase in the cost in dollars RICARDO PRISTUPLUK
“When the dollar rises, operations slow down, but the counterpart decreases construction costs, which provides relief for developers,” analyzes Miguel Ludmer, president of Interwin. He explains that the opposite situation arose last year when the dollar hit $1,200 and costs rose 100% in one year due to inflation. “This scenario drove up the value of existing units because they are based on replacement costs—how much it will cost to build the same square meter,” he adds.
Gerardo Azcuy, head of the eponymous development company with eight projects underway, explains that in a context of sky-high inflation and a stable dollar, " wages have recovered sharply over the last 15 months, making construction costs more expensive in dollars. Meanwhile, materials and equipment, which had risen sharply due to coverage, are beginning to adjust downwards," he analyzes.
However, it provides a surprising fact: during these turbulent months, the market has strongly supported this industry, producing record sales not seen in many years . Azcuy explains this by a new, positive business climate, unlocking pent-up demand that is being channeled into closing deals, accompanied by a consensus that prices per square meter will recover strongly in the coming months.
CEDU is also optimistic: "If the opening of the foreign exchange market is accompanied by lower inflation and competitiveness in inputs, it can significantly improve the cost equation for developers," says Vázquez.
Along the same lines, Narváez adds that "the proposed change creates greater predictability, thus improving planning and reducing costs."
Now, the key to understanding what's coming is to analyze the dollar's evolution in relation to inflation: if the latter increases at a moderate pace but below the exchange rate adjustment, there will still be a gap, and building will be expensive in dollars. If inflation increases at the same rate, the gap will also be expensive, because the cost of construction in US dollars is lagging. "The only way to correct this would be for the dollar to rise faster than inflation ," summarizes Germán Gómez Picasso, director of Reporte Inmobiliario.
5) Foreign investors could start looking at Argentine bricks and mortar
The end of the currency controls could, in the long term, bring more foreign financing to large development companies or the opportunity to partner with companies from other countries.“There are sectors of the economy, such as mining, that were waiting for the currency controls to be lifted to invest. In the case of real estate, there is no such rush, but it is a very small sector with enormous growth potential, and in which the elimination of the exchange restriction could pave the way for that path,” adds González Rouco. Martín Boquete, of Toribio Achaval, clarifies that, while the lifting of the currency controls is an important step, “ Argentina's institutional image in the world is key to ensuring that the economic rules will be maintained in the future .”
Spina believes many are waiting for "the midterm elections and for the plan to be consolidated."
Reducing country risk will also be key as a magnet. "It should be around 300-350 basis points, a distant goal," Salaya Romera quantifies, affirming that institutional or private funds from abroad that anticipate will be the big winners . The reason? Properties in Argentina are "cheap" not only compared to the rest of the world but also to the region.
The latest Latin American real estate survey (RIAL), conducted jointly by Di Tella and Zonaprop, shows that with an average value of US$2,450/m², Buenos Aires ranks fourth in the ranking of the most expensive cities . Montevideo leads the way with US$3,454/m² per square meter, followed by Mexico City (US$2,706/m²) and Monterrey, also in Mexico (US$2,561/m²).
It's worth noting that recently there's been a growing interest from foreigners in purchasing property in the country . In fact, a few days ago, at the launch of a US$75 million investment project in the heart of Palermo , Chinese funds were commenting on the interest in local real estate. "They say they see Argentina as the China of the 1980s," the businessmen stated.
They're also looking at concrete opportunities. The developers of the Palermo-based project acknowledged that Venezuelans, Americans, and Indians had purchased the highest-priced units, which cost around US$650,000 .
This will be the first project that the Brazilian group Safra undertakes in the country.Gentleness
And as if that weren't enough, a few days ago, the Brazilian group Safra, one of the main players in that country's market, announced its first project in Argentina: a US$200 million tower designed by Norman Foster in the Catalinas area.
www.buysellba.com
