Real Estate News The price of housing in Latin America: The Buenos Aires real estate market and how much it costs per sq mtr in the main cities of the region - Infobae

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The price of housing in Latin America: The Buenos Aires real estate market and how much it costs per square meter in the main cities of the region - Infobae​

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El precio de la vivienda en América Latina: el mercado inmobiliario porteño y cuánto cuesta el metro cuadrado en las principales ciudades de la región

Tras años de fluctuaciones, el mercado inmobiliario regional muestra signos de recuperación. En algunas localidades se volvió a valores de prepandemia. El efecto tasa de interés

www.infobae.com

May 19, 2024

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After years of fluctuations, the regional real estate market shows signs of recovery. In some locations, pre-pandemic values were returned. The interest rate effect

By José Luis Cieri

Home sales values in Buenos Aires are facing an incipient rebound. The new mortgage loans can mean that if demand is strong, they will recover more strongly before the end of the year.

The pandemic paralyzed various economic sectors, including real estate and construction, significantly affecting the dynamics of the buying and selling market. In the City of Buenos Aires, after almost six years of falls, which reached up to 50%, prices began to stabilize and show signs of recovery. However, this rebound is still lower than that experienced in other regions of America, where prices not only recovered but, in some cases, exceeded pre-pandemic levels.

After years of fluctuations, in April the Buenos Aires real estate market showed signs of recovery, with a price increase of 0.8%, the largest monthly increase since April 2018, accumulating an increase of 1.9% so far in 2024 and 2.5% year-on-year. Since July 2023, purchase and sale prices showed a growth of 3.1% and in four out of five neighborhoods monthly increases were recorded, with apartments under construction standing out.

Leandro Molina , country manager of the QuintoAndar Group for Argentina and Peru, pointed out to Infobae the fall in real estate values and anticipated a revitalization of the market. For comparison, in Lima, where an increase in both sales and rental prices was observed, mainly attributed to the increase in interest rates in recent years. But this year the gradual reduction of rates raises optimism not only among the firms in the sector but also among those interested in purchasing properties.”

The stabilization of prices in the Buenos Aires real estate market coincides with the reintroduction of mortgage loans for the purchase, renovation or expansion of housing. This move could result in a significant boost to values before the end of the year .

In Peru, the increase in mortgage rates had reduced the number of people eligible for loans by around 16%. The recent decrease in rates promises that more people will be able to qualify for financing again.

In terms of demand and prices per square meter, cities like Mexico and São Paulo surpass Buenos Aires, although Lima remains the most accessible option. “The good news is that in the midst of this situation, in recent months rates have already begun to decrease, in that sense prices are recovering in Peru, allowing many people to renegotiate their credits and migrate to lower rates,” Molina said.

In Lima, home purchase and sale values recovered, especially in premium areas

Mexico​

In contrast, Mexico saw a slowdown in price growth, rising just 1.1% in February 2024, after having seen monthly increases of between 3% and 4.5% in the second half of 2023. Used residential sector is the one that has increased the most since June 2023, adding a growth of 29%.

According to the Association of Banks of Mexico (ABM), by 2024, the market could return to figures similar to those reported during 2022, with a placement amount of around 286,000 million Mexican pesos, which would represent real growth. of 5% annually.

Brazil​

In the South American giant, there is an increase in the prices of properties advertised in cities such as São Paulo and Brasilia, which experienced year-on-year increases of 4% in the first quarter of the year. Rio de Janeiro, on the other hand, shows a decrease of 5%, although a general recovery of the market is projected due to the decrease in interest rates and incentive housing policies.

In macroeconomic terms, 2024 is expected to represent the recovery of property purchase demand. The interest rate has been decreasing since the second half of last year, which has lowered the cost of financing one's own home. Housing policies, such as the Mi Casa Mi Vida Program, can also incentivize the sector, especially in the segment of properties with lower costs, since it offers subsidies for the purchase of homes for a significant part of the population.

Most demanded areas​

In the analysis of the most demanded areas and their prices in Peru, Mexico, Colombia and Brazil, it is observed that Mexico City leads with the highest value per square meter for two-room apartments, reaching an average of USD 2,981 per m2 . It is followed by CABA with an average price of USD 2,427 per m2, and the Brazilian cities of São Paulo and Rio de Janeiro, with average costs of USD 2,411 and USD 2,361 per m2, respectively. On the other hand, Lima offers the most affordable alternative among these locations, with an average price of USD 2,106 per m2.

Mexico City continues to expand

Regarding local demand, Benito Juárez emerges as the preferred district in Mexico City, followed by Cuauhtémoc and Miguel Hidalgo. The latter registers the highest average price in the Mexican market, standing at 111,728 Mexican pesos per m2. In Buenos Aires, Palermo stands out as the most sought-after neighborhood, while Puerto Madero is positioned as the one with the highest value, with USD 5,858 per m2. On the other hand, Lugano represents the cheapest option in the city, with a value of USD 981 per m2.

In Lima, the areas of Santiago de Surco, Miraflores and San Isidro are the most sought-after, with San Isidro Sur being the area with the highest prices for buying and selling. In Brazil, Vila Nova Conceição in São Paulo and Leblon in Rio de Janeiro have the highest prices on the market, marking a notable contrast with the more accessible localities, such as Cidade Tiradentes and Guaianazes, which offer significantly lower prices.

Recovery​

After the pandemic, the Peruvian real estate market, particularly in Lima, experienced a recovery driven mainly by an increase in demand. This situation was due to the improvement in mortgage credit rates and investments in public infrastructure, according to reports from the Peruvian Chamber of Construction.

“In addition, the construction sector showed notable growth, evidenced by the increase in cement sales and progress in public works,” Molina said.

Source: Inmuebles24. Here you can see prices of homes for sale in Mexico that show increases in the last 4 years

At the continental level, market behavior varied. In cities outside of Peru, such as Querétaro and Mérida in Mexico, relocation trends were observed towards areas with a lower cost of living, offering a combination of tranquility and services.

“Cities like Querétaro or Mérida became an option for those looking for tranquility and quality of life, but without leaving aside the fact that they are cities with all the services and good prospects for economic development,” commented Alejandro García del Río , Commercial Director of Properties24.

Monterrey and Mérida, in particular, recorded the largest increases in rental and sales prices, reflecting a dynamism that contrasts with other areas where prices remained more accessible.

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