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Housing construction in Buenos Aires neighborhoods: Which are the areas with the most activity? - Infobae
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Construcción de viviendas en los barrios porteños: cuáles son las zonas de mayor actividad
Hay algunas con una alta concentración de permisos de obra a causa de la demanda. El valor para edificar promedia USD 1.100 por metro cuadrado
www.infobae.com
August 10, 2024
There are some with a high concentration of building permits due to demand. The value for building averages USD 1,100 per square meter.
By Jose Luis Cieri
Private sector housing construction in CABA continues at a good pace even in an economic context with economic decouplings
The Statistical Observatory of the Buenos Aires Real Estate Association reported that 86 permits for new construction projects were granted in May in the city of Buenos Aires. The registered surface area was 133,966 square meters, which represents an increase of 17.09% compared to the previous month.
The neighbourhoods with the most permits granted were Villa Urquiza and Palermo, with 9 permits each, representing 20.9% of the total. Belgrano stood out for being the neighbourhood with the largest registered surface area, 12,906 m2, which is equivalent to 9.63% of the total.
Miguel Chej Muse , coordinator of the observatory, told Infobae that although there will be changes to the Urban Planning Code before the end of the year, activity has improved in recent months compared to the beginning of the year. “The high concentration of permits in neighborhoods like Palermo is due to demand. Their infrastructure and security make them attractive to buyers. Building in high or low demand areas has the same construction cost, but the incidence of the lot changes. For this reason, developers prefer neighborhoods with greater demand and higher sales value per square meter,” he explained to Infobae.
In the case of Villa Urquiza, although it has a high concentration of permits, the density of square meters to be built is not so high due to the type of unification permitted. This impacts the characteristics of the neighborhood, which usually has more green space and a larger registered surface area for construction.
In contrast, Belgrano stands out for allowing more high-rise construction, thanks to its zoning, which results in more square meters per registered project. It is also a demographically consolidated area that is attractive to buyers.
Source: With data obtained from the Cabaprop portal, the Undersecretariat of Urban Management of the Buenos Aires Government and the General Directorate of Registry of Works and Cadastre
“Local policies allow low-rise construction in some neighborhoods, with zoning that determines the basement line and the depth of the lots. This mainly affects neighborhoods such as Villa Urquiza, where most of the developments are middle-class. Several projects were submitted early to comply with current regulations and avoid impacts due to future changes to the Urban Planning Code that will soon be amended ,” added Chej Muse.
Values
The average construction price is approximately USD 1,100 per square meter, depending on the neighborhood, with a lot incidence that varies between USD 500 and USD 800 per m2.Until the end of last year, construction was cheap in dollars. With the change of government, “costs doubled and reached their peak in March. From then on, with the rise of the dollar, the cost of construction was adjusted and in the last two months it has dropped a little, being more reasonable,” explained Damián Tabakman , president of the Chamber of Urban Developers (CEDU).
Since March, sales prices have risen by approximately 15%, also in dollars, due to the increase in costs that had to be passed on to the final price of the home. Tabakman pointed out that, unlike March and April, when the abrupt increase in construction costs caused concern, the outlook is now more optimistic. This improvement has boosted demand in several real estate developments that are finding more favorable projected profitability levels.
In addition, banks have started to approach with credit offers , which also helps. Tabakman said that mortgages are starting to offer financing for real estate developments, “This combination of lower costs and greater access to credit creates a positive scenario for real estate developers in the coming months,” he said.
Transformation
The housing construction sector is undergoing a transformation, moving from a cheap model to an expensive one, where prices need to be updated and prices re-quoted. Added to this is the fact that a large part of the sector was supplied by public works. With high inflation, prices rose, but the lack of public works caused prices to be adjusted.
The emergence of money laundering and credit always represents a hope for the sector, functioning as a great driving force for the industry, generating jobs and real investment.
Julieta Ginevra , director of GNV Group, commented: “The industry is undergoing several changes and all players are re-quoting to find the break-even point in terms of prices. Although these changes result in higher prices, the magnitude of the increase is still uncertain. As for current costs, the premium sector has more room to absorb increases, but there is always a search to improve profitability without altering quality.”
To meet the challenges of rising costs and changing regulations, several strategies are implemented from project conception to construction. During architectural design, costs are constantly reviewed; value engineering is used with consultants; contracts are put out to tender by category inviting various suppliers, and materials are purchased directly to avoid cost overruns.
During the construction phase, the schedule is monitored to minimize lead times and control monthly costs. “The most capable developers will remain,” said Ginevra.
As for the future of the real estate market, considering the recent figures for building permits and the increase in the area registered for new construction, a phase of adjustment and growth is expected. Ginevra concluded: “We have an optimistic outlook, the dynamism of the sector and the new credit conditions together with the strategies implemented will allow us to maintain profitability and move forward with new projects.”
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