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Real Estate Paradox: Neighborhoods in Buenos Aires Where Buying a New Apartment Is Cheaper Than Off-Plan - Infobae
Source:
www.infobae.com
November 15, 2024
Inflationary pressure on construction costs and flexibility in payment plans explain this trend in the market.
By Jose Luis Cieri
The increase in construction costs has made the value of sub-standard housing more expensive than brand new ones in several Buenos Aires neighborhoods (Illustrative Image Infobae)
In several neighborhoods in Buenos Aires , buying a sub-standard apartment can be more expensive than buying a brand new one .
This situation, which seems contradictory, is observed in areas with high real estate dynamism such as Saavedra, Chacarita, Coghlan, Villa Urquiza and Villa Devoto . In these neighborhoods, developers adjust prices as the works progress, passing on the increases in construction costs to buyers.
Furthermore, the expectation of future appreciation encourages many to spend more in the early stages of a project.
Daniel Bryn , from Zipcode and who creates Monitor Inmobiliario, explained to Infobae that in some neighborhoods, such as Saavedra , the cost of apartments in a pit is located at USD 2,478 per square meter , while brand new units are around USD 2,589 .
This difference, although at first glance it seems small, is due to the possibility of paying in installments , which makes the units in the pit more accessible to those who do not have full capital immediately.
“This flexibility of paying in installments allows buyers to adjust their payments based on their income, which is key in an uncertain economic environment,” Bryn adds.
In neighborhoods like Villa Urquiza and Devoto , the difference between prices in the off-plan and brand new homes can reach up to 10 percent. “In these areas, the strong demand for units under construction and the inflationary pressure on project costs make it, paradoxically, more expensive to buy off-plan than to acquire a finished property,” Bryn added.
In Núñez , a 47 m2 studio apartment is priced at USD 139,914 , and in Caballito , a 82 m2 2-bedroom apartment is priced at USD 230,000 , Mudafy reported. Meanwhile, in Belgrano , a 57 m2 1-bedroom unit is priced at around USD 170,000.
This phenomenon is observed in neighborhoods such as Palermo and Núñez , where projects in progress exceed the value of brand new units due to the inclusion of modern technologies and amenities that raise their perceived value," explained Do Canto.
In addition to construction costs, the sector mentioned that the shortage of land in CABA and the imminent modification of the Urban Planning Code are putting pressure on prices.
Do Campo added: “Developers anticipate the impact of restrictions on future construction, which makes ongoing projects more expensive.”
One aspect that encourages buying in condos is the possibility of financing in installments and in pesos, something that is not possible with brand new units. “Developers usually offer 30% down payments and the rest in 24 to 36 installments , which allows buyers to adjust their payments to their income, without needing a mortgage loan,” said Bryn.
This flexibility is crucial in a market where financing options are expanding, thanks to the mortgage loans available for the purchase of brand new properties. In addition, the new loans that will be implemented will allow the acquisition of properties in short supply through future asset mortgages , according to the DNU recently issued by the government.
The rise in construction costs in certain neighborhoods makes it more expensive to buy homes under construction than brand new ones that have already been completed.
Future profitability also plays an important role in the choice of buying off-plan. “Investors seek to take advantage of the progressive appreciation in value during the construction, especially in neighborhoods such as Belgrano and Palermo , where projects are revalued as they progress,” Do Canto added.
This, combined with the possibility of obtaining a 25-30% return during construction, attracts investors looking to capitalize on their savings.
In some cases, one-bedroom apartment in Saavedra or Chacarita can cost between USD 160,000 and USD 180,000 , while a brand new one in the same area is around USD 150,000 to USD 170,000 . “Although the difference is not great, the appeal of paying in installments and the expectation of long-term appreciation mean that many buyers continue to prefer to buy in a well,” said Bryn.
In Villa Devoto , two-bedroom units can cost over USD 200,000 , while brand new apartments are slightly below that figure. This is due to the increased demand for projects under construction , which allows developers to adjust prices upwards.
www.buysellba.com
Source:
Paradoja inmobiliaria: en qué barrios de CABA es más barato comprar un departamento a estrenar que en pozo
La presión inflacionaria en los costos de construcción y la flexibilidad en los planes de pago explican esta tendencia en el mercado
www.infobae.com
November 15, 2024
Inflationary pressure on construction costs and flexibility in payment plans explain this trend in the market.
By Jose Luis Cieri
The increase in construction costs has made the value of sub-standard housing more expensive than brand new ones in several Buenos Aires neighborhoods (Illustrative Image Infobae)
In several neighborhoods in Buenos Aires , buying a sub-standard apartment can be more expensive than buying a brand new one .
This situation, which seems contradictory, is observed in areas with high real estate dynamism such as Saavedra, Chacarita, Coghlan, Villa Urquiza and Villa Devoto . In these neighborhoods, developers adjust prices as the works progress, passing on the increases in construction costs to buyers.
Furthermore, the expectation of future appreciation encourages many to spend more in the early stages of a project.
Daniel Bryn , from Zipcode and who creates Monitor Inmobiliario, explained to Infobae that in some neighborhoods, such as Saavedra , the cost of apartments in a pit is located at USD 2,478 per square meter , while brand new units are around USD 2,589 .
This difference, although at first glance it seems small, is due to the possibility of paying in installments , which makes the units in the pit more accessible to those who do not have full capital immediately.
“This flexibility of paying in installments allows buyers to adjust their payments based on their income, which is key in an uncertain economic environment,” Bryn adds.
In neighborhoods like Villa Urquiza and Devoto , the difference between prices in the off-plan and brand new homes can reach up to 10 percent. “In these areas, the strong demand for units under construction and the inflationary pressure on project costs make it, paradoxically, more expensive to buy off-plan than to acquire a finished property,” Bryn added.
Brand new values
In CABA, brand new apartments come in a wide range of prices depending on location and size. For example, in Colegiales , a 36 m² studio apartment costs USD 111,800 , while in Recoleta , a 71 m² one-bedroom apartment costs USD 293,000 , according to Zonaprop.In Núñez , a 47 m2 studio apartment is priced at USD 139,914 , and in Caballito , a 82 m2 2-bedroom apartment is priced at USD 230,000 , Mudafy reported. Meanwhile, in Belgrano , a 57 m2 1-bedroom unit is priced at around USD 170,000.
Adjust
Andrea Borges Do Canto , director of Alianza Urbana , highlighted that developers are forced to adjust prices due to the rise in construction costs, which have increased by nearly 280% in the last 12 months.This phenomenon is observed in neighborhoods such as Palermo and Núñez , where projects in progress exceed the value of brand new units due to the inclusion of modern technologies and amenities that raise their perceived value," explained Do Canto.
In addition to construction costs, the sector mentioned that the shortage of land in CABA and the imminent modification of the Urban Planning Code are putting pressure on prices.
Do Campo added: “Developers anticipate the impact of restrictions on future construction, which makes ongoing projects more expensive.”
One aspect that encourages buying in condos is the possibility of financing in installments and in pesos, something that is not possible with brand new units. “Developers usually offer 30% down payments and the rest in 24 to 36 installments , which allows buyers to adjust their payments to their income, without needing a mortgage loan,” said Bryn.
This flexibility is crucial in a market where financing options are expanding, thanks to the mortgage loans available for the purchase of brand new properties. In addition, the new loans that will be implemented will allow the acquisition of properties in short supply through future asset mortgages , according to the DNU recently issued by the government.
The rise in construction costs in certain neighborhoods makes it more expensive to buy homes under construction than brand new ones that have already been completed.
Future profitability also plays an important role in the choice of buying off-plan. “Investors seek to take advantage of the progressive appreciation in value during the construction, especially in neighborhoods such as Belgrano and Palermo , where projects are revalued as they progress,” Do Canto added.
This, combined with the possibility of obtaining a 25-30% return during construction, attracts investors looking to capitalize on their savings.
In some cases, one-bedroom apartment in Saavedra or Chacarita can cost between USD 160,000 and USD 180,000 , while a brand new one in the same area is around USD 150,000 to USD 170,000 . “Although the difference is not great, the appeal of paying in installments and the expectation of long-term appreciation mean that many buyers continue to prefer to buy in a well,” said Bryn.
In Villa Devoto , two-bedroom units can cost over USD 200,000 , while brand new apartments are slightly below that figure. This is due to the increased demand for projects under construction , which allows developers to adjust prices upwards.
www.buysellba.com
