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Should you build or buy in a gated community? Rising costs redefine real estate choices - Infobae
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www.infobae.com
January 06, 2025
Values have registered strong increases, which raises the dilemma between buying a lot to build according to budget and preferences, or acquiring a house ready to move into.
By Jose Luis Cieri
Construction of premium homes faces record costs in private developments
The increasing costs of construction in Argentina , especially for premium homes located in gated communities, have raised questions about whether it is more convenient to build from scratch or buy a finished property.
The debate is centered on those who plan to move into a development in the suburban real estate market and are hesitating between buying a ready-to-move-in property — whether used or brand new — or acquiring a plot of land and building, in a context where costs have increased by more than 150% year-on-year.
According to an analysis by Reporte Inmobiliario, the cost of building a home in a gated community exceeded $3,274,000 per square meter. This figure includes taxes and fees. This puts several new properties out of the reach of the budgets of various local and international buyers.
The report details that building a high-end 315-square-meter house requires more than $1 billion, which is equivalent to about USD 830,000 at the free dollar exchange rate.
José Rozados , from Reporte Inmobiliario, pointed out that, “the low inflation during the last 9 months in pesos, combined with a dollar that remained stable, did not manage to prevent construction values from continuing to increase,” he added.
In this regard, Rozados explained: “The increase in costs is largely due to underlying inflation, which is growing month by month, although it is already showing a slowdown compared to what happened until last May. In addition, the strengthening of the peso against the dollar made projects more expensive in foreign currency.”
Construction generates risks associated with increases in materials and labor, according to specialists (Illustrative Image Infobae)
Rozados also pointed out that those seeking to build face greater risks and uncertainty: “Today, the only way to start a project would be to budget in pesos and update it month by month with reliable indexes, such as that of the Argentine Chamber of Construction (CAC),” he stressed.
Ignacio O'Keefe , director of Inmobiliaria O'Keefe, said that finished houses offer savings of up to 25% compared to construction costs. “This depends on the neighborhood and the characteristics of the property, but the replacement cost in some cases is higher than the price of already built houses that can be found on the market,” he said.
This difference lies in financial predictability. “Building creates uncertainty because labor and materials are often affected by unpredictable increases; while buying guarantees ownership at an agreed cost, without the risks of future inflation,” O'Keefe emphasized.
A brand new home in a gated community located in Hudson, a choice that many prioritize
However, the segment also warns about the evolution of the value of ready-to-move-in units: resale properties are beginning to increase their valuation to reflect the high replacement costs.
O'Keefe added: “Sellers and developers are beginning to adjust the values of these homes in light of the increasing difficulty and cost of starting new construction.”
However, the process can be highly demanding both logistically and emotionally.
For his part, Esteban Edelstein Pernice , from Castex Properties, argued that although construction allows for greater customization, “the great advantage of a finished home is that it eliminates uncertainty about additional times and costs, and allows you to enjoy the property immediately.”
A work from its beginning with the traditional system takes an average of one year to complete.
He also stressed that there are still opportunities to be found in the used housing market, especially in less sought-after neighbourhoods or older properties.
A 3-room house with 250 square meters, with a barbecue area and pool, has an average price of USD 150,000, while a 4-room house starts at USD 200,000 if it is more than 10 years old.
Larger properties, less than 5 years old, or in exclusive developments, can reach values of up to USD 3,000,000, especially in country estates in Pilar, Hudson or Tigre, among other notable areas.
Modern homes with pools and outbuildings, close to the water, are among the most expensive on the suburban real estate market
In this context, Rozados added that the decision to build or buy will depend on the priorities of each buyer: “Opting for a finished house may be more convenient in financial and time terms, but building offers the possibility of materializing a personal dream.”
“During 2024 we have seen a high sale of second-hand homes, but the supply remains limited as many people prefer to build their homes from scratch,” explained Edelstein Pernice.
When buying land and building, it is important to bear in mind that the process can take a year (if it is dry, it can be completed sooner), which makes it difficult to accurately predict the final cost of the work. Although a budget can be made, it will always be approximate. On the other hand, acquiring a finished property offers the advantage of negotiating prices in a favorable context for making offers.
www.buysellba.com
Source:
¿Conviene construir o comprar en un barrio privado?: la suba de costos redefine las elecciones inmobiliarias
Los valores registraron fuertes subas, lo que plantea la disyuntiva entre comprar un lote para construir según presupuesto y preferencias, o adquirir una vivienda lista para habitar
www.infobae.com
January 06, 2025
Values have registered strong increases, which raises the dilemma between buying a lot to build according to budget and preferences, or acquiring a house ready to move into.
By Jose Luis Cieri
Construction of premium homes faces record costs in private developments
The increasing costs of construction in Argentina , especially for premium homes located in gated communities, have raised questions about whether it is more convenient to build from scratch or buy a finished property.
The debate is centered on those who plan to move into a development in the suburban real estate market and are hesitating between buying a ready-to-move-in property — whether used or brand new — or acquiring a plot of land and building, in a context where costs have increased by more than 150% year-on-year.
According to an analysis by Reporte Inmobiliario, the cost of building a home in a gated community exceeded $3,274,000 per square meter. This figure includes taxes and fees. This puts several new properties out of the reach of the budgets of various local and international buyers.
The report details that building a high-end 315-square-meter house requires more than $1 billion, which is equivalent to about USD 830,000 at the free dollar exchange rate.
José Rozados , from Reporte Inmobiliario, pointed out that, “the low inflation during the last 9 months in pesos, combined with a dollar that remained stable, did not manage to prevent construction values from continuing to increase,” he added.
The impact on costs
If the dollar were to rise sharply in 2025, construction costs could continue to rise.In this regard, Rozados explained: “The increase in costs is largely due to underlying inflation, which is growing month by month, although it is already showing a slowdown compared to what happened until last May. In addition, the strengthening of the peso against the dollar made projects more expensive in foreign currency.”
Construction generates risks associated with increases in materials and labor, according to specialists (Illustrative Image Infobae)
Rozados also pointed out that those seeking to build face greater risks and uncertainty: “Today, the only way to start a project would be to budget in pesos and update it month by month with reliable indexes, such as that of the Argentine Chamber of Construction (CAC),” he stressed.
Buying, a more accessible option
In contrast to the high costs of building, acquiring finished properties appears to be a more favorable alternative, especially in suburban areas of Greater Buenos Aires. However, the development of new buildings is evident along routes such as the Panamericana on the Tigre, Campana and Escobar branches; the Acceso Oeste in the Moreno and Luján areas; the Buenos Aires-La Plata Highway, with a focus on Hudson; and the green corridor that connects Canning with San Vicente.Ignacio O'Keefe , director of Inmobiliaria O'Keefe, said that finished houses offer savings of up to 25% compared to construction costs. “This depends on the neighborhood and the characteristics of the property, but the replacement cost in some cases is higher than the price of already built houses that can be found on the market,” he said.
This difference lies in financial predictability. “Building creates uncertainty because labor and materials are often affected by unpredictable increases; while buying guarantees ownership at an agreed cost, without the risks of future inflation,” O'Keefe emphasized.
A brand new home in a gated community located in Hudson, a choice that many prioritize
However, the segment also warns about the evolution of the value of ready-to-move-in units: resale properties are beginning to increase their valuation to reflect the high replacement costs.
O'Keefe added: “Sellers and developers are beginning to adjust the values of these homes in light of the increasing difficulty and cost of starting new construction.”
Active participation vs. immediacy
For some buyers, the possibility of participating in the design and custom construction is a decisive factor. Building a home of their own remains a personal aspiration and part of the life plan of hundreds of families.However, the process can be highly demanding both logistically and emotionally.
For his part, Esteban Edelstein Pernice , from Castex Properties, argued that although construction allows for greater customization, “the great advantage of a finished home is that it eliminates uncertainty about additional times and costs, and allows you to enjoy the property immediately.”
A work from its beginning with the traditional system takes an average of one year to complete.
He also stressed that there are still opportunities to be found in the used housing market, especially in less sought-after neighbourhoods or older properties.
Home values
Home prices vary depending on factors such as location - in neighborhoods with water, such as Nordelta or Puertos, or those with golf courses (preferably in Cañuelas or Luján), or in private developments with fewer amenities -, the square footage of the lots and the number of rooms and outbuildings.A 3-room house with 250 square meters, with a barbecue area and pool, has an average price of USD 150,000, while a 4-room house starts at USD 200,000 if it is more than 10 years old.
Larger properties, less than 5 years old, or in exclusive developments, can reach values of up to USD 3,000,000, especially in country estates in Pilar, Hudson or Tigre, among other notable areas.
Challenge
Forward-looking analysis is key in real estate decisions. Edelstein Pernice believes that although “costs are stable and could even decrease if materials are imported,” construction in Argentina still faces significant challenges related to currency fluctuations and inflation.
Modern homes with pools and outbuildings, close to the water, are among the most expensive on the suburban real estate market
In this context, Rozados added that the decision to build or buy will depend on the priorities of each buyer: “Opting for a finished house may be more convenient in financial and time terms, but building offers the possibility of materializing a personal dream.”
The suburban market is growing
This sector of real estate reflected an increase in the supply of finished properties, although it is modest compared to the available land.“During 2024 we have seen a high sale of second-hand homes, but the supply remains limited as many people prefer to build their homes from scratch,” explained Edelstein Pernice.
When buying land and building, it is important to bear in mind that the process can take a year (if it is dry, it can be completed sooner), which makes it difficult to accurately predict the final cost of the work. Although a budget can be made, it will always be approximate. On the other hand, acquiring a finished property offers the advantage of negotiating prices in a favorable context for making offers.
www.buysellba.com
