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Properties: Is Milei's win a good or bad sign for the real estate - La Nación Propiedades
Source:
www.lanacion.com.ar
August 15, 2023
By: Candelaria Reinoso Taccone
The surprising result of the elections raises uncertainty: What effect will they have on the housing market and construction costs?
The experts who until a few days ago were excited about a change in the cycle and a reactivation of the sector, analyze the implications of the volatility of the dollar and the electoral results.
The sharp devaluation on a black Monday for the markets and the results of the PASO generated a scenario of uncertainty in the real estate sector. The industry that, during the last months, was excited about a change of cycle with a tail breeze and a scenario of sales values on the floor . In recent months, real estate developers were surprised because contrary to what usually happens in election years, the needle was moving. That is, there was no wait & see attitude. It is that despite the economic ambiguity, the properties were consolidated as an investment refuge. However, the current political and economic scenario opens more than one question: the first of them isHow will the surprise election results impact the real estate market? Will it affect the construction cost? Will operations stop?
The results of the STEP generated a scenario of uncertainty in the real estate sector.Instagram @javiermilei
"The results of the elections have removed the fear of populism and have reinforced the idea of private property , a crucial aspect for investors," replies Germán Gómez Picasso, founder of Real Estate Report, who also clarifies that, historically, whenever there is a jump in the price of the dollar, inquiries decrease -a phenomenon that paradoxically has not happened in recent weeks-. However, he is optimistic and believes that once some stability in the value of the dollar is established, the inquiries will return with greater force.
It must be borne in mind that the market is going through “bonanza” times compared to demand since 2020. Queries have not decreased in recent months, despite the volatility of the parallel dollar. Along these lines, July marked a milestone : it was the first month in 52 -since March 2019- in which prices grew, albeit incipiently: 0.1% in a market in which the average sale value of a property in the city stands at US$2,153 per m² -based on data from Zonaprop-.
The real estate sector closed the first half of the year with a rise of 15% compared to 2022.
In addition, the sector closed the first half of the year with an increase of 15% compared to 2022. ” This encouraging data is consistent with the fact that all the months of this 2023 were positive compared to the previous one, something that had not happened in 2022. And the curve of the pandemic up to here is in slow recovery, ”says Jorge De Bartolo, president of the College of Notaries of the City of Buenos Aires.
Daniel Bryn, owner of Invertiré Real Estate, marks three time horizons: short, medium and long term. In the first, he foresees a decrease in inquiries and closings of operations due to the volatility of the dollar. However, he suggests that if the dollar stabilizes, these figures may recover . In the medium term, he anticipates more uncertainty until the end of the year, but is confident of continued investment desire from many buyers , which could boost the market. In the long term, he considers that the prospects are positive, especially if there is a change in the political cycle that promotes greater economic stability and less state intervention.
The real estate broker Fabián Achával contributes that the market is at its most dynamic in recent months, driven mainly by a drop in prices that boosted demand. "Both national and international investors returned to the market, reactivating sectors such as higher-value real estate and premium ventures ," he assures.
These indications reflect an interest in long-term investments and a possible transition in the economic cycle. He points out that the PASO results and the consequent exchange rate volatility had a predictable impact. As other experts have already mentioned, when the official exchange rate shakes, consultations and visits are consequently reduced until it stabilizes again, and according to Achaval, this reaction pattern is a constant in the market. “In this case, the jump in the exchange rate will generate uncertainty and slow down the operational activity, especially since the result of the elections was not foreseen by the market ”, He affirms.
However, the broker emphasizes the presence of numerous positive factors that influence the real estate market . The reform agenda proposed by the candidates stands out, all of them in line with promoting the market. "Although the turbulence generated by the exchange rate jump will generate a momentary pause, in the medium-term outlook it continues to be favorable," he says. In his view, the combination of price changes, attractiveness for investors and a pro-market reformist agenda augur a positive horizon for the sector .
In relation to used properties , Diego Migliorisi, managing partner of Migliorisi Inmobiliaria, provides his particular analysis. He highlights that prices, which have been adjusted to current values since 2019, will not experience significant changes . From his perspective, these values have already reached their lowest level.
The impact on the cost of construction
When talking about investments in new construction projects, Gómez Picasso explains that the cost of construction anticipates a window of opportunity for those who have dollars and projects underway , since they could take advantage of the lower costs in dollars generated by the devaluation. always, although they already discount an accelerated pass through process -the impact that a rise in the exchange rate has on prices-. What do I mean this? That the window of opportunity will be short term.
For José Rozados, another of the directors of Real Estate Report, the new construction costs will generate an opportunity in the short term for those who have projects underway and have dollars . This is due to the possibility of taking advantage of a temporary decrease in costs in foreign currency, as happened last June, when it was estimated that the cost of building a high-quality house was around US$2,299.73 per square meter at the official quote. However, if the price of the blue dollar was considered towards the end of the month, a considerable reduction in costs was observed. In this case, the cost per square meter decreased significantly to US$1,247.73. This is equivalent to almost half of the original cost calculated at the official price.
Experts anticipate a window of opportunity in the cost of construction for those who have dollars and projects underway.
Martin Pinus, an expert in the premium real estate market, points out that in the long term, regardless of the candidate who becomes president, the outlook is quite encouraging. “Although these variables can even affect the acquisition of materials in the case of construction, the current retraction is mainly temporary ”, He assures. As uncertainties clear up, the situation "could improve."
Bryn emphasizes that input suppliers are on "frozen lists" and are not accepting dollar-related orders, such as steel and iron. "In the short term, this could result in an increase in the cost of construction in pesos, but over time it will adjust," says the expert.
Despite this, however, he stresses that over the past 10 years, construction costs have remained low. Over the past year, the cost of construction has held steady, but is still 10 percent below the decade average. That is to say, it is not the opportunity of October 2020 when it reached its historical floor of the last 20 years, but it is still an attractive investment . In this context, Bryn explains that it is feasible to seize the opportunity to carry out construction projects .
The future of rentals
Soledad Balayan, owner at Maure Inmobiliaria, focuses on the rental market . "Today I couldn't pass a rental appraisal in pesos," she says, and confesses that she hasn't received orders for two weeks. Recall that July marked another record rise with numbers through the roof. In specific data, a studio apartment in the city of Buenos Aires reached an average value of $143,825 per month, two $176,244 and a three, $230,178, according to data from Zonaprop.
These are the apartments that have not yet found a tenant, which enter the market and adjust their values to start the new contracts. Only in the month of July, prices climbed 11.3% , a rise that for the third consecutive month marks a record of monthly increase since the real estate portal carried out the survey. In the first seven months of the year, the published value of rentals grew by 89.6%, above the increase in inflation (62.5%) and the index with which rental contracts already in force are updated ( 57.3%). While in the interannual comparison the increase was of152.9%, also the highest recorded since the beginning of the series in 2012. This rise exceeds the variation in year-on-year inflation, which was 116.4%, and the ICL adjustment, which was 108.2%.
Although uncertainty is present, Balayan expects the outlook to clear up after the elections and sees more challenges in the rental market than in the sales market in the coming weeks. "I see the rental market as more complicated than the sales market in the coming weeks," he insists.
July marked another record rise with sky-high numbers in the rental market.Ricardo Pristupluk - The Nation
Beyond the reality of the rental market, in the sales market, experts anticipate a temporary slowdown in inquiries and operations, they share the expectation of a more encouraging outlook in the medium and long term , with the hope of greater economic stability and politics in the country.
www.buyellba.com
Source:
Propiedades: ¿El triunfo de Milei es una buena o mala señal para el mercado inmobiliario?
Los expertos que hasta hace unos días se ilusionaban con un cambio de ciclo y una reactivación del sector, analizan las implicaciones de la volatilidad del dólar y los resultados electorales
www.lanacion.com.ar
August 15, 2023
By: Candelaria Reinoso Taccone
The surprising result of the elections raises uncertainty: What effect will they have on the housing market and construction costs?
The experts who until a few days ago were excited about a change in the cycle and a reactivation of the sector, analyze the implications of the volatility of the dollar and the electoral results.
The sharp devaluation on a black Monday for the markets and the results of the PASO generated a scenario of uncertainty in the real estate sector. The industry that, during the last months, was excited about a change of cycle with a tail breeze and a scenario of sales values on the floor . In recent months, real estate developers were surprised because contrary to what usually happens in election years, the needle was moving. That is, there was no wait & see attitude. It is that despite the economic ambiguity, the properties were consolidated as an investment refuge. However, the current political and economic scenario opens more than one question: the first of them isHow will the surprise election results impact the real estate market? Will it affect the construction cost? Will operations stop?
The results of the STEP generated a scenario of uncertainty in the real estate sector.Instagram @javiermilei
"The results of the elections have removed the fear of populism and have reinforced the idea of private property , a crucial aspect for investors," replies Germán Gómez Picasso, founder of Real Estate Report, who also clarifies that, historically, whenever there is a jump in the price of the dollar, inquiries decrease -a phenomenon that paradoxically has not happened in recent weeks-. However, he is optimistic and believes that once some stability in the value of the dollar is established, the inquiries will return with greater force.
It must be borne in mind that the market is going through “bonanza” times compared to demand since 2020. Queries have not decreased in recent months, despite the volatility of the parallel dollar. Along these lines, July marked a milestone : it was the first month in 52 -since March 2019- in which prices grew, albeit incipiently: 0.1% in a market in which the average sale value of a property in the city stands at US$2,153 per m² -based on data from Zonaprop-.
The real estate sector closed the first half of the year with a rise of 15% compared to 2022.
In addition, the sector closed the first half of the year with an increase of 15% compared to 2022. ” This encouraging data is consistent with the fact that all the months of this 2023 were positive compared to the previous one, something that had not happened in 2022. And the curve of the pandemic up to here is in slow recovery, ”says Jorge De Bartolo, president of the College of Notaries of the City of Buenos Aires.
Daniel Bryn, owner of Invertiré Real Estate, marks three time horizons: short, medium and long term. In the first, he foresees a decrease in inquiries and closings of operations due to the volatility of the dollar. However, he suggests that if the dollar stabilizes, these figures may recover . In the medium term, he anticipates more uncertainty until the end of the year, but is confident of continued investment desire from many buyers , which could boost the market. In the long term, he considers that the prospects are positive, especially if there is a change in the political cycle that promotes greater economic stability and less state intervention.
The real estate broker Fabián Achával contributes that the market is at its most dynamic in recent months, driven mainly by a drop in prices that boosted demand. "Both national and international investors returned to the market, reactivating sectors such as higher-value real estate and premium ventures ," he assures.
These indications reflect an interest in long-term investments and a possible transition in the economic cycle. He points out that the PASO results and the consequent exchange rate volatility had a predictable impact. As other experts have already mentioned, when the official exchange rate shakes, consultations and visits are consequently reduced until it stabilizes again, and according to Achaval, this reaction pattern is a constant in the market. “In this case, the jump in the exchange rate will generate uncertainty and slow down the operational activity, especially since the result of the elections was not foreseen by the market ”, He affirms.
However, the broker emphasizes the presence of numerous positive factors that influence the real estate market . The reform agenda proposed by the candidates stands out, all of them in line with promoting the market. "Although the turbulence generated by the exchange rate jump will generate a momentary pause, in the medium-term outlook it continues to be favorable," he says. In his view, the combination of price changes, attractiveness for investors and a pro-market reformist agenda augur a positive horizon for the sector .
In relation to used properties , Diego Migliorisi, managing partner of Migliorisi Inmobiliaria, provides his particular analysis. He highlights that prices, which have been adjusted to current values since 2019, will not experience significant changes . From his perspective, these values have already reached their lowest level.
The impact on the cost of construction
When talking about investments in new construction projects, Gómez Picasso explains that the cost of construction anticipates a window of opportunity for those who have dollars and projects underway , since they could take advantage of the lower costs in dollars generated by the devaluation. always, although they already discount an accelerated pass through process -the impact that a rise in the exchange rate has on prices-. What do I mean this? That the window of opportunity will be short term.
For José Rozados, another of the directors of Real Estate Report, the new construction costs will generate an opportunity in the short term for those who have projects underway and have dollars . This is due to the possibility of taking advantage of a temporary decrease in costs in foreign currency, as happened last June, when it was estimated that the cost of building a high-quality house was around US$2,299.73 per square meter at the official quote. However, if the price of the blue dollar was considered towards the end of the month, a considerable reduction in costs was observed. In this case, the cost per square meter decreased significantly to US$1,247.73. This is equivalent to almost half of the original cost calculated at the official price.
Experts anticipate a window of opportunity in the cost of construction for those who have dollars and projects underway.
Martin Pinus, an expert in the premium real estate market, points out that in the long term, regardless of the candidate who becomes president, the outlook is quite encouraging. “Although these variables can even affect the acquisition of materials in the case of construction, the current retraction is mainly temporary ”, He assures. As uncertainties clear up, the situation "could improve."
Bryn emphasizes that input suppliers are on "frozen lists" and are not accepting dollar-related orders, such as steel and iron. "In the short term, this could result in an increase in the cost of construction in pesos, but over time it will adjust," says the expert.
Despite this, however, he stresses that over the past 10 years, construction costs have remained low. Over the past year, the cost of construction has held steady, but is still 10 percent below the decade average. That is to say, it is not the opportunity of October 2020 when it reached its historical floor of the last 20 years, but it is still an attractive investment . In this context, Bryn explains that it is feasible to seize the opportunity to carry out construction projects .
The future of rentals
Soledad Balayan, owner at Maure Inmobiliaria, focuses on the rental market . "Today I couldn't pass a rental appraisal in pesos," she says, and confesses that she hasn't received orders for two weeks. Recall that July marked another record rise with numbers through the roof. In specific data, a studio apartment in the city of Buenos Aires reached an average value of $143,825 per month, two $176,244 and a three, $230,178, according to data from Zonaprop.
These are the apartments that have not yet found a tenant, which enter the market and adjust their values to start the new contracts. Only in the month of July, prices climbed 11.3% , a rise that for the third consecutive month marks a record of monthly increase since the real estate portal carried out the survey. In the first seven months of the year, the published value of rentals grew by 89.6%, above the increase in inflation (62.5%) and the index with which rental contracts already in force are updated ( 57.3%). While in the interannual comparison the increase was of152.9%, also the highest recorded since the beginning of the series in 2012. This rise exceeds the variation in year-on-year inflation, which was 116.4%, and the ICL adjustment, which was 108.2%.
Although uncertainty is present, Balayan expects the outlook to clear up after the elections and sees more challenges in the rental market than in the sales market in the coming weeks. "I see the rental market as more complicated than the sales market in the coming weeks," he insists.
July marked another record rise with sky-high numbers in the rental market.Ricardo Pristupluk - The Nation
Beyond the reality of the rental market, in the sales market, experts anticipate a temporary slowdown in inquiries and operations, they share the expectation of a more encouraging outlook in the medium and long term , with the hope of greater economic stability and politics in the country.
www.buyellba.com
