BuySellBA
Administrator
The fall in home sales prices stopped: Why 2024 would be a year of recovery after a prolonged real estate crisis - Infobae
Source:
Cesó la caída en los precios de venta de viviendas: por qué 2024 sería un año de recuperación tras una prolongada crisis inmobiliaria
Aunque la posibilidad de descensos o aumentos, en función de las circunstancias de cada propiedad, aún persiste, el Relevamiento de Operaciones Inmobiliarias (ROI) confirma que en líneas generales los valores de los departamentos usados alcanzaron su punto más bajo
www.infobae.com
March 23, 2024
Although the possibility of decreases or increases, depending on the circumstances of each property, still persists, the Real Estate Operations Survey (ROI) confirms that in general terms the values of used apartments reached their lowest point
By José Luis Cieri
The purchase and sale of properties has been on the rise in CABA since last year and specialists are confident that 2024 will be a year of recovery for the sector (Photo: Pixabay)
The closing prices of properties in the used residential sector in the city of Buenos Aires stopped falling, according to the Real Estate Operations Survey (ROI), which detected that 2023 is the first year where prices have not fallen since 2019. Regarding 2022, a zero (0%) year-on-year variation rate in the price per square meter of real estate was observed.
The ROI is an initiative that analyzes the behavior of the sector, made up of 26 real estate companies that share quantitative and qualitative information on real estate sales operations for almost 5 years.
Fabián Achával, from Fabián Achával Propiedades, one of the analysts who carried out this report, confirmed to Infobae : “This is the first year in which, on an annual average, prices did not decrease. This is undoubtedly excellent news, although we maintain a cautious view towards the future.”
The fall in the price per m2 between the first quarter of 2019 and the last quarter of 2023 was 33.3% in nominal terms and 44.7% in real terms.
Source: Survey of Real Estate Operations (ROI)
Soledad Balayan, from Maure Inmobiliaria, who also contributed to the report, explained: “The brake on the fall in price per m2 is significant, but it does not imply that this behavior applies to all properties. Some may still have room to decline. At the same time, others are likely to not only stop declining, but even increase, depending largely on demand.”
What was marketed
According to the work, what was sold the most during 2023 were the 3-room apartments, representing 29% of the operations. This trend has been systematically repeated every year since the survey existed. “We don't have much historical data but the 3-bedroom has always been the pearl of the purchase and sale market. It is a standard home that responds to the average size of a family,” Balayan said.The distribution of sales by number of rooms can be seen in the following graph.
Source: Survey of Real Estate Operations (ROI)
The investor type of customer represented 11.8% of sales in 2023. The rest of the purchases were made for housing purposes for personal use.
Balayan clarified: “To the extent that there is an expectation of intervention in the rental market, the percentage of investors will probably not increase significantly. We do not have historical data on this variable because it was not something that was measured previously. It would have been interesting to have the percentage of investments in times like the '90s, where there was economic stability and investment in real estate was more profitable to be able to determine if that 11.8% is low or not."
Last year was one of transition; The rental supply was greatly reduced due to the impact of the Law (now repealed) and this caused a part of the investment demand to decline. “This year we expect a rebound,” Achával added.
Source: Survey of Real Estate Operations (ROI)
On average, the studio apartments sold have a total of 35 m2, the 2 rooms 47 m2, the 3 rooms 76 m2 and the 4 rooms 86 m2 (including the uncovered meters).
“Clearly the real estate investor looks for properties that provide greater profitability and that has to do with a balance between the price of the property and the income that can be obtained from the rental. On the other hand, small properties have less maintenance costs than large ones in addition to the demand effect. Approximately 70% of rental demand is in 1- and 2-bedroom units,” Balayan said.
80% of sales are units in a building without amenities. 17% of the apartments sold have a single view and 16% are in towers.
Discounts in negotiations
During 2023, the average trading percentage with respect to the last published value was 8%, falling 0.5 percentage points compared to 2022.Haggling is slowly converging to 2019 values (7.4%) but far from the historical average of 5% (see chart).
Source: Survey of Real Estate Operations (ROI)
During the last quarter of the year, the trading percentage was 7.7% compared to the last published value, showing a drop of 1.3 percentage points compared to the last quarter of the previous year.
Future
Last year marked a milestone for ROI, being the best since its inception, and expectations for 2024 point to this year being a turning point to enhance the growth evidenced in the last season.Achával, when analyzing last year's dynamics, noted: "During the first semester, we observed a slight recovery in nominative prices, while in the second, despite seeing a temporary increase in operations, prices decreased slightly."
Experts are cautious about the future, since various factors could influence both a price increase and a new downward trend.
Among the positive drivers are the increase in construction costs in a context of exchange stability, the recovery of salaries measured in dollars, the marked decrease in the supply of real estate for sale and the possible elimination of the exchange rate. However, uncertainty persists about the Government's ability to stabilize the macroeconomy, control inflation and avoid a new devaluation of the official exchange rate, while the real economy is beginning to suffer.
Achával concluded: “If we take a more optimistic perspective on the number of transactions, given that prices have fallen significantly in real terms since 2019 (by 45%) and probably even more from the highs of 2018, this will be the main driver of recovery.”
www.buysellba.com
Now it is time to go back up. From my experience in real estate people think things will keep going up forever and they think prices will fall forever when times are bad. 
