BuySellBA
Administrator
Is the real estate market turning around? : Why in the sector they assure that 2023 will mark the end of the crisis - Infobae
Source:
¿Se da vuelta el mercado inmobiliario?: por qué en el sector aseguran que 2023 marcará el final de la crisis
Tras un extenso calendario de elecciones y desafíos económicos, la construcción de viviendas continuó a ritmo sostenido y se registraron operaciones de compra y venta, marcando una clara recuperación desde 2018
www.infobae.com
December 23, 2023
Is the real estate market turning around? : Why in the sector they assure that 2023 will mark the end of the crisis
After an extensive calendar of elections and economic challenges, housing construction continued at a sustained pace and purchase and sale operations were recorded, marking a clear recovery since 2018.
Housing construction remains at a good pace and closes a recovery schedule after 5 years. From the sector they hope that progress will be strengthened in the future.
A few days before the closing of another calendar, developers and real estate agencies agree that 2023 could be a turning point, consolidating the expansion registered since 2018. The number of purchase and sale operations increased and in the city of Buenos Aires, more than 50,000 homes are still under construction.
During the year, marked by an extensive electoral calendar and fluctuations in the economic situation, there were two strong devaluations: one in August after the PASO and another recently, after the inauguration of President Javier Milei. Despite these challenges, experts maintain that the real estate market demonstrates resilience and projects a growth horizon for the future.
While the population reflects on the fate of property values, the majority of businessmen in the sector are optimistic and anticipating an increase in purchase and sale prices in the medium term.
Vanesa Jaimovich , marketing manager of the developer Newland, shared her optimistic perspective with Infobae . “Investment and demand for properties will continue, as the need to purchase homes or make changes will remain constant. “Purchase decisions continued to be finalized until the end of the year,” she noted.
Until last April, values experienced a downward trend in both used and brand-new properties, but then stabilized. The decrease is minimal and fluctuated at 1.5% during the last semester and an increase of 2% was even recorded in some prominent neighborhoods, such as Palermo, Belgrano, Villa del Parque, Caballito, Almagro, among others.
“The issue of home prices for sale generates uncertainty. It will be necessary to wait how the economy adjusts with respect to service, transportation and energy rates. Later, the impact of the economy will be observed on the dynamics of real estate sector values, which at least during the last 6 months stopped falling as strongly as they did until the end of 2022,” said Fabián Achával, of Fabián Achával. Properties.
Devaluations strengthen those who have dollars in the cushion to defend with their purchasing power. Juan Bautista Arnaude, from Arnaude Brokers, commented that “this situation will put greater pressure on those who need to sell their properties, seeking to achieve a clear effect: to reduce their prices. In the short term, the latest devaluation will lead to an accentuation of the fall in real estate sales prices.”
Until now, in the used property market there has been a 48% decrease in values compared to 2018. For brand new homes in CABA, the reduction was 38 percent.
“In the long term, with measures aimed at stabilizing the economy, it is expected that values will gradually recover and increase, given that we are currently at historic lows. If the measures implemented by the Government manage to have a positive effect, there is an optimistic outlook for the market in the future,” added Arnaude.
The demand for permanent housing shows an evident increase: according to the Buenos Aires College of Notaries, until last November almost 36,000 deeds were registered in CABA, exceeding the 33,753 carried out in 2022. Similarly, the Buenos Aires College of Notaries carried out nearly 11,000 acts in November, the best record of 2023.
Costs in brand new homes
Although the devaluation generates an increase in construction costs , experts maintain that these would not be transferred to the final value of the homes under construction, which usually take between two and four years to complete.
Experts maintain that the initial uncertainty generated by the new government measures will obviously impact the real estate market, creating a period of expectation and caution, but they agree that the balance of 2023 is very positive.
Miguel Ludmer , from Interwin Real Estate Marketing, highlighted that despite being a year with high inflation and exchange volatility, the market was active. “We noticed a fairly positive level of activity throughout the year, which even exceeded our 2022 results by almost 50%.”
Lack of access to credit leads buyers to seek more affordable options, based on personal preferences and financial capabilities.
“Meanwhile, investors, although more selective, are looking for housing opportunities, preferably with tickets of around USD 60,000,” Jaimovich highlighted.
In well and rising material prices
In addition to additional import costs and exchange rate instability, brutal inflation generated distortions in building materials and value speculation.Ludmer added: “There was also the difficulty and fear of not being able to obtain a SIRA again (acronym for the Import System of the Argentine Republic, an electronic mechanism used in the government of Alberto Fernández to manage operations) or of not be able to import. This caused prices to be quite inflated or with inefficient coverage margins.”
Experts estimate that, although building costs may increase due to this situation, they will also become more competitive when imports are opened and profit margins are more limited.
Construction closes the year with very positive activity levels, being at full occupancy and with maximum employability.
In costs, inflation and devaluation affect pricing, but the cost of construction in dollars remains favorable, maintaining a good time to build. Currently, the price varies between USD 650 and USD 1,200 per m2, far from the USD 1,700 reached in 2017.
Manuel Valdes , commercial director of the construction company CRIBA in Argentina and Uruguay, commented that “regarding the takeoff of the sector, clear rules and stability are needed, including exchange rates, predictability and inflation control. The lack of mortgage loans and a reduction in taxes are also areas to improve to expand access to home ownership.”
In CABA there are several neighborhoods that have a good pace of housing works such as Villa Devoto (and its connection with Villa Lynch on the Buenos Aires side), Palermo, Paseo del Bajo (between Monserrat and San Telmo), Innovation Park (in Núñez), Coghlan, Saavedra, Colegiales, Caballito, Villa del Parque, among others.
In the district of San Miguel there are a lot of homes under construction, as in other towns in Greater Buenos Aires
The values of the well units' range between USD 1,900 and USD 4,000 per m2 between standard and premium. “There is also growth in tourist cities such as Mendoza, Salta, Río Hondo, among others, with demand from both Argentines and foreigners. Growth is observed in consolidated Buenos Aires neighborhoods such as Palermo, Belgrano and Barrio Parque, and in others in development such as Chacarita and Almagro,” Valdes noted.
“Gated neighborhoods experienced outstanding sales performance, possibly influenced by the profound post-pandemic change, which led many people to reevaluate their values and priorities. This generated a growing interest in towns such as Ezeiza, Tigre, San Vicente, Pilar or Hudson, among others, where families sought a lifestyle more oriented to well-being, sports and nature,” according to Esteban Edelstein Pernice, from Castex.
In Greater Buenos Aires there are also more than 80,000 homes under construction and dynamism. There are parties like San Miguel, Vicente López, Esteban Echeverría, Ituzaingó, La Plata, Quilmes, Tigre, San Martín, among others that attract the greatest interest.
From the segment, the balance of 2023 is positive when comparing the last four years in the real estate market.
Hugo Koifman, from the developer Branson, concluded: “The resilience of the Argentine people reflected in the continuous investment, land acquisition and construction projects is crucial. “We envision a scenario conducive to growth, especially if the dollar is unified, inflation is reduced and imports are opened, benefiting buyers, sellers and suppliers.”
www.buysellba.com
