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Properties: The apartments that must be bought because they are cheap and will revalue with mortgage loans - La Nacion Propiedades
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Propiedades: los departamentos que hay que comprar porque están baratos y se revalorizarán con los créditos hipotecarios
La revalorización del metro cuadrado favorecen la compra de ciertas propiedades como una opción segura y rentable tanto para inversores como para quienes buscan adquirir una vivienda
www.lanacion.com.ar
May 24, 2024
The revaluation of the square meter favors the purchase of certain properties as a safe and profitable option for both investors and those looking to purchase a home.
By Candela Contreras
The prices of real estate properties have a direct impact on the used market
After four years in which property values went down , as of July 2023, prices began to stabilize : the average value of a square meter in the city of Buenos Aires in April stood at US$2,219 , accumulating an increase of 1.9% in the first quarter of the year and 2.5% in the last 12 months, according to the recent Zonarop report . However, when analyzing the purchase options for both housing and investment, experts agree on which units represent the most attractive alternative: used ones .
“ Today it is convenient to buy used apartments . Although the supply has decreased recently, the value per square meter is still well below that of brand new units, and, if they are not yet recycled, we can find even lower values. The difficulty of this choice lies in having all the money together to disburse or access a mortgage loan ; or if I have the potential to imagine how that unit could look post-renovation, and in the middle probably afford a rental and two moves,” says Irina Vecchi, Director of Soldati Pilar.
But, in the current context characterized by the return of mortgage credit in Argentina , with the help of 10 banking entities: Banco Hipotecario, Nación, Ciudad, Supervielle, ICBC, Santander, Banco de Córdoba (Bancor), Banco del Neuquén, Banco de Corrientes and Banco Del Sol, having to disburse all the money together “may no longer be a difficulty . ” "Despite this, I do not believe that there is a need to speculate with owning one's own home, but rather that the current scenario has more incentives for the investor who does not need credit to buy and who speculates that as soon as the credits are viable, the properties will go to rise considerably,” analyzes Ignacio Camps, director of Evoluer Real Estate.
In numbers, used apartments are located in April at an average value of US$2,061/m² , which represents the lowest prices on the market compared to brand new units (US$2,566) and those in a well (US$2,550). But they also recorded the smallest increase in the first four months of 2024 , with an increase of 1.08% , in contrast to 3.63% for brand new properties and 7.26% for well-stocked units.
Used apartments have an average value of US$2049 per square meter
“ Acquiring a used property allows you to set the price definitively , avoiding the uncertainties associated with increases in construction costs when purchasing an apartment in a well ( it is paid in installments adjusted with the CAC index ). Furthermore, almost no construction company is selling in one payment, they all do it in installments for the same reason: because of the increases, since they do not know how much they are going to end up paying for the work,” says Daniel Bryn, creator of the real estate monitor Invertire. In addition, he points out that the profitability of these properties experienced a notable increase , of around 4.5% annually , "in contrast to the average of 2% and 3% of the last five years," and adds that the used ones that go on the market at an affordable price and that are well located “ they are the product that sells best .”
What's more, according to a report prepared by the real estate company Zipcode , in March the stock for sale fell by 25% compared to the same month last year. It is worth clarifying that a large percentage of the properties that were for sale, after the repeal of the rental law on December 29, 2023 - when the DNU signed by Javier Milei came into force -, returned to renting versus the possibility of agreeing on the points of the contract between the parties.
On the other hand, according to reports from the real estate portal, the cost of construction measured in dollars registered an increase of 40.4% in 2024: building today costs almost triple what it cost in October 2020, the minimum recorded. by the platform, and 34.9% above the 2012-2023 average. “This situation caused an increase in the value of the square meter in the well , which has a direct and favorable impact on the used property market ,” adds Daniel Salaya Romera, owner of the real estate company of the same name. Furthermore, he assures that there is currently a trend of urgency among buyers to acquire used properties that have not experienced an increase in value and that are at attractive prices .
For his part, Germán Gómez Picasso, co-founder of Reporte Inmobiliario , highlights that used apartments experienced an increase in their values in recent months : 1.09% compared to September 2023. “This phenomenon is attributed to various factors, such as low relative prices, the increase in construction costs in dollars, the improvement in rental income, the expectation of rising property prices, among others,” he specifies.
Increases in construction costs have a direct increase in demand for used units
If you are thinking of buying a property with these characteristics, both as an investment and for your own home, you must take into account certain key points :
1) In which neighborhoods are the most expensive and cheapest apartments located?
“Depending on the location and nature of the property, a brand new apartment can be priced up to 30% higher than a used one ,” adds Francisco Altgelt, President of Altgelt Negocios Inmobiliarios . A clear example of this is Recoleta, where the average prices of used apartments reach US$2,458/m², while brand new apartments are around US$3,151/m².In Puerto Madero, the neighborhood with the highest market values, a used apartment has an average price of US$5,569/m² , while a well apartment costs US$6,074/m² and a brand new apartment costs US$6,430/m², according to April data.
Palermo is the second most expensive neighborhood in the city . The price of a used one drops to US$2,915/m² while a well apartment is available for an average price of US$3,338/m², and a brand new one for US$3,454/m².
On the opposite side, the cheapest square meter is found in Lugano , with a used value of US$981/m² , and Nueva Pompeya follows with used ones for US$1,350/m² .
For its part, the values of those used in the middle zone are found in Agronomía, San Telmo and Villa Luro , they are around US$1834, US$1825 and US$1804 per square meter, respectively.
Palermo is the second neighborhood with the most expensive square meter in the city
2) What are the main differences between a brand new and a used one?
Regarding the difference between a brand new unit and a used one , Soldati clarifies that, although the former have a higher cost, “the value invested in the purchase remains at high levels for much longer, and when it comes to needing sell, it will be favored in terms of deadlines.” Along these lines, this is also the con: brand new units tend to have higher sales values than used ones.In addition, when purchasing a recently completed property there are certain additional costs : higher deed expenses, regulation fees, the accommodation fund, among others.
Along these lines, Martín Boquete, director of Toribio Achaval , agrees that a new or brand new apartment always starts with a sales value above the used one with similar characteristics because they are projects that have more modern materials and a design more adapted to the needs. needs of the moment. “If the decision is to rent it for three years, once finished, the unit will need an investment to then put it back into its new state,” he explains.
3) What tips are necessary to know before buying a used one
- It is key to visit the property with a construction specialist . The law does not establish any specific prohibition regarding the construction or conservation status of a unit that is sold.
- Verify the correct operation and flow of all services : water and gas pressure, electricity power, among others.
- Verify that the apartment is not occupied or rented since the law does not prohibit the sale of an occupied property.
- Verify the identity between what was built and the plans registered in the corresponding state agency . The existence of differences that hinder or delay the deed is common.
- Verify if the property is seized, mortgaged, in succession or with any legal restriction , if the seller is the sole owner or not and if there are any restrictions on selling.
“As for the viability of buying a used apartment that needs renovation, the decision varies depending on the buyer's preferences. Some choose to acquire units in poor condition to leave their own mark, while others prefer to minimize the necessary repairs to adapt it to their taste and needs without major investment,” adds Altgelt.
Demand rises for used apartments
4) What profitability do they leave according to the number of environments
Based on the latest data collected by Real Estate Report, corresponding to the month of March 2024, an interesting dynamic is revealed regarding the annual gross profitability of apartments used with one to four rooms : the average figure obtained is 4 .44% . Regarding each typology, the data reveal that three-room apartments are the most profitable , with an average of 4.63% annually ; They are followed by two-room apartments with 4.45% ; those from an environment with 4.35% ; Finally, four-room apartments achieve an average profitability of 4.31% annually .However, it is important to highlight that this data is obtained with the first month of the start of the rental and must be analyzed in a current context of contractual freedom between the parties, so it will depend on the agreed update rate for it to be maintained or is diluted if the purchase and sale value of the property is considered stable: the greater the increase in the shorter time, the higher the percentage will be .
Previously, the profitability in the first month of starting the rental remained stable for long periods because the rental law prevented updating before the year and then the updating of the rental values was modified after 6 months, using a preset index that did not keep pace with inflation (ICL for contracts signed until October 17, 2023; and Casa Propia for agreements agreed between October 18 and December 28, 2023). “ This quickly caused a drop in the real rental price and a decrease in profitability in a context of very high price growth in the economy,” they explain from Reporte Inmobiliario.
With the repeal of this law, it opens the way to greater flexibility in rental contracts, allowing more frequent adjustments. This translates into a more stable income for owners, which can make real estate investment more attractive .
5) What will be the impact of the credits on property prices?
If a credit boom is not expected , brokers affirm that there will not be a price increase in the short and medium term. “For the price market to adjust there must be volume and it does not seem to me that there is still a context of trust for that to happen,” responds Carlos Spina, partner of Argencons, the developer who created the Quartier brand, who clarifies that for the The advancing process should lower inflation and, also, rates .In other words, in a scenario in which the macro eats away at purchasing power, the immediate effects on sales values become complicated. In any case, the “green shoots” of credit could benefit used units more than 20 years old with typologies far from what post-pandemic buyers are looking for . “If everything goes well we will see a realignment of prices but only next year,” explains Federico González Rouco, an economist specializing in housing. Likewise, it must be taken into account that beyond the credit effect, the real estate market has been experiencing a cycle change with rising prices for months.
Looking to the future and regardless of the credit effect, Martín Boquete, from Toribio Achával, anticipates an increase of 10% until the end of the year and up to 25% by the middle of next year. “It will be key for inflation to be stabilized and to be able to operate in dollars,” he insists.
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