BuySellBA
Administrator
The Milei phenomenon
December 11, 2023
Result of survey on expectations of the new Government: great optimism, repeal of the Rental Law is expected, return of mortgage credit and rise in real estate prices. 1,405 Responses.
From Reporte Inmobiliario we prepared a survey in order to foresee what the expectations are for the sector from the new leadership of the Argentine Republic of the elected president, Javier Milei.
The consultation garnered an excellent level of responses from 1,405 users. It was carried out through a pre-established online collection form through two emails sent to the Real Estate Report subscriber base, sent on December 1st and 5th. The achieved sample size determines a margin of error of 2.61% with a confidence level of 95% for a group of people within which all participants in the real estate and construction sectors of the country would be included.
According to the analysis of the results, it is clear that the real estate sector currently has the perception that the activity is not going through a good moment. 57.6% affirm that the situation today is “bad”, while 29.5% describe it as “regular”. Adding those who perceive the situation in the sector as bad and fair, the negative assessment reaches 87.1%. Only 9.5% believe that the situation is good:
From the responses received, it was possible to verify that the degree of optimism with the assumption of the new leadership of the executive branch is very high. 72.4% affirm that Javier Milei's government will be positive for the real estate market. On the other hand, 14.9% affirm that it will be negative. In the middle, 12.7% think that it will be indifferent for the sector:
One of the great problems that the sector is going through occurs in the segment of the residential rental market, and some sectors that participate in this market have already demanded its “repeal”, precisely one of the first statements of the president-elect was that would prompt that action. Regarding this issue, by a large majority, 86.4% of the survey participants definitely agree with said repeal.
Javier Milei also referred to the possibility of limiting public works, and based on the survey responses he would have the support of the real estate sector in that sense. Thus, 63.4% would see the measure as “positive” while 36.6% see it as “negative.”
The sector is going through different problems that affect its dynamics. The survey sought to identify which is perceived as the most serious by establishing a preselection of three obstacles that could surely be observed as some of the most important: legal uncertainty, monetary volatility and lack of credit. Well, for market participants, the number one problem today is the “impossibility of access to mortgage credit” (67.6%); followed by “exchange rate volatility” (19.6%), and then by “legal uncertainty” (12.7%):
Optimism about the arrival of mortgage credit - on the other hand the main problematic obstacle identified in the sample for its operation - is such in the face of the change of Government that 60.8% believe that the arrival of this type of financing would be possible with the new management. 39.2% believe, on the contrary, that this would not yet be possible.
A topic of permanent debate, which has been further encouraged in recent months, is the level of property prices in Argentina. In this case, the market mostly believes that under the leadership of Javier Milei the values in dollar bills will appreciate in the next two years, although 37% believe that they will remain at current levels. Only 18.4% perceive that real estate prices could go down.
In light of the results of the survey, the expectations generated by the arrival of the new President are very encouraging, it would be desirable that these can be met, taking into account the relevance that the sector has within general economic activity.
The real estate and construction sector are a thermometer of the rest of the economic sectors; When the economy grows, people invest in property, more is built and new real estate projects are launched. In recent months, a change in price trends and effective demand has already begun to be seen based on the presumption of a part of the population that anticipated a change in the national leadership and that it was the right time to invest prior to a possible market recovery.
www.buysellba.com
