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Gated communities: Prices, in dollars, of construction fell - La Nación Propiedades
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www.lanacion.com.ar
November 03, 2023
Construction costs are at their lowest point since the pandemic and countries are experiencing a construction boom, but political uncertainty raises concerns; what you need to know.
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At the end of August, the cost of building a house in a country was at its lowest point in US dollars since January 2021 but there is one factor that makes it difficult to take advantage of the opportunity
In an unpredictable and volatile country like Argentina, undertaking long-term projects becomes a challenge of proportions . Economic and political uncertainty can generate doubts and concerns among those planning to build a home, make significant renovations, or close construction projects that have been underway for some time. However, in the midst of this turbulence, a window of opportunity opens for those willing to consider it. Although the recent devaluation impoverished wages and inflated prices, it also gave (for an indefinite period) a break to the cost of construction.
During the last two years, costs measured in US currency were subject to a roller coaster ride, fluctuating in time with inflation in pesos and continuous devaluations. However, the depreciations of recent weeks placed these costs at an even lower level, at least at the end of August, thus marking the lowest point in US dollars since January 2021 , according to the most recent report from Reporte Inmobiliario.
Modificar imagen
At the end of August the cost in pesos was calculated at $814,000/m2
In the case of the cost of construction of a premium category residence in a country or private neighborhood, with taxes and professional fees included, at the end of August it was estimated at approximately $814,000 per square meter. To build a 315 m² home, an investment of close to $256,280,664 would be required. If these numbers are taken into account and the price of the dollar in the parallel market at that time is considered , construction in August averaged around US$1,084 per square meter , while at the official exchange rate, the calculation would be US$2,295.
Modificar imagen
Over the past two years, costs measured in US currency have been on a roller coaster ride.
“We all know that the costs and price of blue have been constantly changing for months; If we add an estimated 20% increase in pesos to the cost at the end of August and take today's dollar bill, the costs would be at an incredibly low level in blue dollars, below US$1000/m² ," he explains. Germán Gómez Picasso, one of the founders of Reporte Inmobiliario. However, the expert also points out the current uncertainty, and adds: "We all know that this would be a snapshot and it is very difficult to estimate what would happen in the medium and long term in a process of elections , constant devaluations and unchecked inflation."
Modificar imagen
Construction poses a unique challenge: it cannot be planned with current data.
Since February 2023, construction costs have experienced a significant decline, driven by recurring devaluations. During this period, the value of the blue dollar increased from $370 to $1,050 (today $915). Although costs are currently at unusually low levels, construction poses a unique challenge: it cannot be planned on current data . “Those who make the decision to start the construction of a home should consider that, on average, at least six months pass from the beginning to the actual construction, and about two years to its completion . In the Argentine context, the oscillations of inflation in pesos and the fluctuations in exchange rates are extremely unpredictable,” highlights Gómez Picasso. However, it is always advisable to start a project from a more affordable cost base instead of starting with high expenses.
Right now, the opportunity is for those who have construction projects underway or are considering remodeling or additions , since in the short term the chances of costs skyrocketing are significantly lower. “It is time to accelerate, acquire all the necessary materials and hire the largest amount of available labor, as long as conditions allow, although in many cases logistics imposes a limit on the speed of construction that is around eight months. ” advises Gómez Picasso.
Modificar imagen
It is estimated that there are around 8,000 houses in the country under construction.
The current construction cost outlook in dollars is more uncertain than ever. Unlike previous election years, in which the ruling party sought to stabilize the value of the dollar and, consequently, construction costs remained stable for a time, this year that strategy could not be carried out. “The current uncertainty is so pronounced that it is practically impossible to predict what the future will bring in terms of construction costs,” warns the expert.
The curious fact is that, despite this context of uncertainty, there is a boom in housing construction in private neighborhoods and it is estimated that there are around 8,000 houses in the process of construction , although Gómez Picasso suggests that this figure could even be older with a more favorable political reality. This phenomenon can be attributed to several factors: first, construction was relatively cheaper during the pandemic due to the restrictions that existed and the price then grew as construction and the sale of materials were reactivated; In addition, many people have chosen to move out of the city and live in greener environments. “Over the last two or three years, land sales in gated communities have been very successful. At this point, the majority of buyers have already developed their projects and are ready to enjoy them ,” comments the founder of Reporte Inmobiliario.
What is unprecedented is that despite the context of elections, the real estate market registered a boom in lot sales. A concrete example is Aluén , the closed neighborhood in the southern area that at the launch of its second stage sold 90% of the lots in one hour , where 62 buyers accessed its plot of land and left only eight vacant lots of the 70 that are marketed in this instance of the project.
Modificar imagen
Despite this context of uncertainty, there is a boom in the purchase of lots and construction of homes in private neighborhoods.
However, the specialist insists that a critical factor could be delaying the progress of construction: political uncertainty. “Everything that is happening in the political sphere is generating a pause in decision-making,” says the expert. If we objectively evaluate the numbers, all signs would point to this being the right time to start construction projects . However, the uncertainty regarding the runoff, the lack of clarity about what will happen to the dollar, the stocks or inflation sow doubts in people. Gómez Picasso clarifies that we are not witnessing the same boom that occurred in the post-pandemic and if it were not for this situation, “we would surely be seeing a much greater increase in construction.”
Modificar imagen
The model property has a total surface area of 315 homogenized m², with 50% of the semi-covered surfaces.
For these construction cost calculations, a single-family home located within a closed neighborhood in the Buenos Aires suburbs was taken as a reference . Built on an 800 m² plot of land on the corner of a central block. The construction involves being built on two levels, with removal of the dividing axes of the property, generating gardens and vehicle parking space.
You enter an access and distribution hall that leads to the living room, dining room, reception toilet, kitchen and family room. The service units and laundry room complete the level. Towards the quiet part of the building and outside it has a semi-covered gallery with a grill. The upper level is reserved for the intimate area with three bedrooms, the main one en suite with a dressing room and two with closets and a bathroom.
Model construction plans
The construction system is traditional, with a reinforced concrete and masonry structure. It includes a flat slab roof, complete facilities and equipment in bathrooms and kitchen , underfloor heating system using an individual boiler, heavy aluminum exterior carpentry and interior wooden doors including fronts and interior closets. In addition, the calculation includes exterior finishes made of plastic plaster and interior finishes with lime plaster. It should be noted that the floors are ceramic in wet cores, porcelain in public areas and parquet in bedrooms.
In total, the house has a total surface area of 315 homogenized m², with the semi-covered surfaces being taken at 50%.
The work is carried out through separate contracts under the direction and coordination of a professional. The budget includes costs of materials, equipment, labor, general expenses, freight, transfers, help from unions and taxes. Professional fees are also contemplated, which were calculated at a rate of 13% of the cost of work per project, direction and administration of work. The construction period is 14 months.
www.buysellba.com
Source:
Bajó el costo, en dólares, de construir una casa en un country
Los costos de construcción se encuentran en su punto más bajo desde la pandemia y los countries están viviendo un boom de obras, pero la incertidumbre política genera inquietudes; lo que hay que saber
www.lanacion.com.ar
The cost, in dollars, of building a house in a gated community fell
Construction costs are at their lowest point since the pandemic and countries are experiencing a construction boom, but political uncertainty raises concerns; what you need to know.
At the end of August, the cost of building a house in a country was at its lowest point in US dollars since January 2021 but there is one factor that makes it difficult to take advantage of the opportunity
In an unpredictable and volatile country like Argentina, undertaking long-term projects becomes a challenge of proportions . Economic and political uncertainty can generate doubts and concerns among those planning to build a home, make significant renovations, or close construction projects that have been underway for some time. However, in the midst of this turbulence, a window of opportunity opens for those willing to consider it. Although the recent devaluation impoverished wages and inflated prices, it also gave (for an indefinite period) a break to the cost of construction.
During the last two years, costs measured in US currency were subject to a roller coaster ride, fluctuating in time with inflation in pesos and continuous devaluations. However, the depreciations of recent weeks placed these costs at an even lower level, at least at the end of August, thus marking the lowest point in US dollars since January 2021 , according to the most recent report from Reporte Inmobiliario.
At the end of August the cost in pesos was calculated at $814,000/m2
In the case of the cost of construction of a premium category residence in a country or private neighborhood, with taxes and professional fees included, at the end of August it was estimated at approximately $814,000 per square meter. To build a 315 m² home, an investment of close to $256,280,664 would be required. If these numbers are taken into account and the price of the dollar in the parallel market at that time is considered , construction in August averaged around US$1,084 per square meter , while at the official exchange rate, the calculation would be US$2,295.
Over the past two years, costs measured in US currency have been on a roller coaster ride.
“We all know that the costs and price of blue have been constantly changing for months; If we add an estimated 20% increase in pesos to the cost at the end of August and take today's dollar bill, the costs would be at an incredibly low level in blue dollars, below US$1000/m² ," he explains. Germán Gómez Picasso, one of the founders of Reporte Inmobiliario. However, the expert also points out the current uncertainty, and adds: "We all know that this would be a snapshot and it is very difficult to estimate what would happen in the medium and long term in a process of elections , constant devaluations and unchecked inflation."
Construction poses a unique challenge: it cannot be planned with current data.
Since February 2023, construction costs have experienced a significant decline, driven by recurring devaluations. During this period, the value of the blue dollar increased from $370 to $1,050 (today $915). Although costs are currently at unusually low levels, construction poses a unique challenge: it cannot be planned on current data . “Those who make the decision to start the construction of a home should consider that, on average, at least six months pass from the beginning to the actual construction, and about two years to its completion . In the Argentine context, the oscillations of inflation in pesos and the fluctuations in exchange rates are extremely unpredictable,” highlights Gómez Picasso. However, it is always advisable to start a project from a more affordable cost base instead of starting with high expenses.
Right now, the opportunity is for those who have construction projects underway or are considering remodeling or additions , since in the short term the chances of costs skyrocketing are significantly lower. “It is time to accelerate, acquire all the necessary materials and hire the largest amount of available labor, as long as conditions allow, although in many cases logistics imposes a limit on the speed of construction that is around eight months. ” advises Gómez Picasso.
The construction boom and political uncertainty
It is estimated that there are around 8,000 houses in the country under construction.
The current construction cost outlook in dollars is more uncertain than ever. Unlike previous election years, in which the ruling party sought to stabilize the value of the dollar and, consequently, construction costs remained stable for a time, this year that strategy could not be carried out. “The current uncertainty is so pronounced that it is practically impossible to predict what the future will bring in terms of construction costs,” warns the expert.
The curious fact is that, despite this context of uncertainty, there is a boom in housing construction in private neighborhoods and it is estimated that there are around 8,000 houses in the process of construction , although Gómez Picasso suggests that this figure could even be older with a more favorable political reality. This phenomenon can be attributed to several factors: first, construction was relatively cheaper during the pandemic due to the restrictions that existed and the price then grew as construction and the sale of materials were reactivated; In addition, many people have chosen to move out of the city and live in greener environments. “Over the last two or three years, land sales in gated communities have been very successful. At this point, the majority of buyers have already developed their projects and are ready to enjoy them ,” comments the founder of Reporte Inmobiliario.
What is unprecedented is that despite the context of elections, the real estate market registered a boom in lot sales. A concrete example is Aluén , the closed neighborhood in the southern area that at the launch of its second stage sold 90% of the lots in one hour , where 62 buyers accessed its plot of land and left only eight vacant lots of the 70 that are marketed in this instance of the project.
Despite this context of uncertainty, there is a boom in the purchase of lots and construction of homes in private neighborhoods.
However, the specialist insists that a critical factor could be delaying the progress of construction: political uncertainty. “Everything that is happening in the political sphere is generating a pause in decision-making,” says the expert. If we objectively evaluate the numbers, all signs would point to this being the right time to start construction projects . However, the uncertainty regarding the runoff, the lack of clarity about what will happen to the dollar, the stocks or inflation sow doubts in people. Gómez Picasso clarifies that we are not witnessing the same boom that occurred in the post-pandemic and if it were not for this situation, “we would surely be seeing a much greater increase in construction.”
What is a model property like?
The model property has a total surface area of 315 homogenized m², with 50% of the semi-covered surfaces.
For these construction cost calculations, a single-family home located within a closed neighborhood in the Buenos Aires suburbs was taken as a reference . Built on an 800 m² plot of land on the corner of a central block. The construction involves being built on two levels, with removal of the dividing axes of the property, generating gardens and vehicle parking space.
You enter an access and distribution hall that leads to the living room, dining room, reception toilet, kitchen and family room. The service units and laundry room complete the level. Towards the quiet part of the building and outside it has a semi-covered gallery with a grill. The upper level is reserved for the intimate area with three bedrooms, the main one en suite with a dressing room and two with closets and a bathroom.
Model construction plans
The construction system is traditional, with a reinforced concrete and masonry structure. It includes a flat slab roof, complete facilities and equipment in bathrooms and kitchen , underfloor heating system using an individual boiler, heavy aluminum exterior carpentry and interior wooden doors including fronts and interior closets. In addition, the calculation includes exterior finishes made of plastic plaster and interior finishes with lime plaster. It should be noted that the floors are ceramic in wet cores, porcelain in public areas and parquet in bedrooms.
In total, the house has a total surface area of 315 homogenized m², with the semi-covered surfaces being taken at 50%.
The work is carried out through separate contracts under the direction and coordination of a professional. The budget includes costs of materials, equipment, labor, general expenses, freight, transfers, help from unions and taxes. Professional fees are also contemplated, which were calculated at a rate of 13% of the cost of work per project, direction and administration of work. The construction period is 14 months.
www.buysellba.com
