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Why the real estate market has consolidated its recovery and how it can avoid a price bubble - Infobae
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www.infobae.com
January 29, 2025
With almost 28,000 deeds executed between Buenos Aires and the province in December 2024, the sector has left its worst years behind. The recovery, comparable to the levels of 2017 and 2018, opens up positive prospects for the current year.
By Jose Luis Cieri
The Buenos Aires real estate market is reviving: record figures and strong impulses for reactivation (Illustrative Image Infobae)
The real estate market in CABA and the province of Buenos Aires closed 2024 with a significant increase in purchase and sale operations and between both districts almost 28,000 transactions were completed in December, which represented the best record in the last six years.
In CABA, the year-on-year growth was 68.1% compared to the same month of the previous year, while in the province it reached 48.63% when comparing last December with that of 2023, according to data from the Notary Associations that cover both districts.
“2024 was the best year in terms of deeds in both CABA and PBA due to multiple causes,” said Alejandro Braña , a Real Estate expert and member of the Buenos Aires Real Estate Association.
According to Braña, one of the key factors was the series of measures implemented since the arrival of the new government led by Javier Milei , measures that generated, in his words, "a shock of confidence not seen in decades."
Among the highlighted actions he mentioned, the repeal of the Rental Law ( the offer grew by 200% since the DNU came into force ), the elimination of the Real Estate Transfer Tax (ITI), and the return of mortgage loans. “The impact of these reforms is profound. The rental sector, which had been in crisis for more than 42 months, and the sales and purchase sector are showing a considerable recovery,” said Braña.
Most homes were sold for less than USD 120,000 in CABA.
Oscar Puebla , architect and real estate expert, analyzed: “Another factor in the recovery is the flat dollar and its consequent inflation measured in dollars . Many people realized this situation and moved their unproductive savings from under the mattress to invest in real assets with concrete possibilities of capitalization in the future.”
“We ended the year with a December that registered 1,130 mortgages, compared to 97 in the same month in 2023, a figure that marks a total growth of 1,065%,” Braña explained. However, it is noted that the impact of current loans remains limited, as they represent only 15% of operations compared to the 40% reached during the peak of UVA in 2017-2018.
The sector stressed that, in addition to the loans, the recovery is linked to measures such as the elimination of restrictive procedures for residents abroad and the reduction of up to 50% in fees and tariffs for the Real Estate Registry.
“The first half of the year was marked by expectations about the new government's policies. However, the launch of mortgage loans, a more defined economic outlook and the implementation of the money laundering system significantly boosted demand in the second half of the year,” said Puebla.
Looking ahead to 2025, projections are optimistic and mortgage lending could triple .
Estimates predict a record market if current trends continue and money from money laundering begins to flow in . “If just 20% of the USD 23 billion externalized is allocated to the real estate market, we would be talking about figures that would exceed everything that was achieved in 2024,” said Braña.
The change of government restored confidence and reactivated investment in real estate despite the exchange rate restrictions. The number of deeds exceeded the 64,000 transactions recorded in 2011, and it is expected to reach or even exceed that level during 2025.
Current conditions are different from the bubble (which occurs when property prices rise disproportionately with respect to their real value due to speculation or excess demand, and generate an unsustainable market) of 2017-2018, according to Braña, when UVA credits drove a large part of the purchases and prices rose sharply, with an average of USD 2,800 per m2 in CABA between August and the end of 2018.
Reforms such as the elimination of taxes boosted the reactivation of the market (Illustrative Image Infobae)
To avoid similar imbalances, he recommended promoting instruments such as divisible mortgages , which could diversify the options between new and used properties.
Prices have already increased by between 7% and 10% in most areas , while in Buenos Aires neighborhoods such as Núñez and Villa Ortúzar they have climbed up to 15% year-on-year , according to an analysis by Cabaprop, Reporte Inmobiliario, Mercado Libre and the University of San Andrés.
The sector maintains that no additional regulatory measures are necessary to control property market prices.
"The market itself is responsible for balancing prices due to the wide range of available offers and the restrictions that many buyers face in accessing mortgage loans. This would limit excessive increases and maintain organic and sustainable growth," concluded Puebla.
www.buysellba.com
Source:
Por qué el mercado inmobiliario consolidó su recuperación y cómo puede evitar una burbuja de precios
Con casi 28.000 escrituras realizadas entre Buenos Aires y la provincia en diciembre de 2024, el sector dejó atrás sus peores años. La recuperación, comparable a los niveles de 2017 y 2018, abre perspectivas positivas para el año en curso
www.infobae.com
January 29, 2025
With almost 28,000 deeds executed between Buenos Aires and the province in December 2024, the sector has left its worst years behind. The recovery, comparable to the levels of 2017 and 2018, opens up positive prospects for the current year.
By Jose Luis Cieri
The Buenos Aires real estate market is reviving: record figures and strong impulses for reactivation (Illustrative Image Infobae)
The real estate market in CABA and the province of Buenos Aires closed 2024 with a significant increase in purchase and sale operations and between both districts almost 28,000 transactions were completed in December, which represented the best record in the last six years.
In CABA, the year-on-year growth was 68.1% compared to the same month of the previous year, while in the province it reached 48.63% when comparing last December with that of 2023, according to data from the Notary Associations that cover both districts.
“2024 was the best year in terms of deeds in both CABA and PBA due to multiple causes,” said Alejandro Braña , a Real Estate expert and member of the Buenos Aires Real Estate Association.
According to Braña, one of the key factors was the series of measures implemented since the arrival of the new government led by Javier Milei , measures that generated, in his words, "a shock of confidence not seen in decades."
Among the highlighted actions he mentioned, the repeal of the Rental Law ( the offer grew by 200% since the DNU came into force ), the elimination of the Real Estate Transfer Tax (ITI), and the return of mortgage loans. “The impact of these reforms is profound. The rental sector, which had been in crisis for more than 42 months, and the sales and purchase sector are showing a considerable recovery,” said Braña.
Most homes were sold for less than USD 120,000 in CABA.
Oscar Puebla , architect and real estate expert, analyzed: “Another factor in the recovery is the flat dollar and its consequent inflation measured in dollars . Many people realized this situation and moved their unproductive savings from under the mattress to invest in real assets with concrete possibilities of capitalization in the future.”
Mortgage loans, the axes of the rebound
One of the keys to the recovery was the resurgence of mortgage lending after an absence of more than six years. According to official figures, 5,082 mortgages were obtained in 2024 , which represented a year-on-year increase of 246.2 percent.“We ended the year with a December that registered 1,130 mortgages, compared to 97 in the same month in 2023, a figure that marks a total growth of 1,065%,” Braña explained. However, it is noted that the impact of current loans remains limited, as they represent only 15% of operations compared to the 40% reached during the peak of UVA in 2017-2018.
The sector stressed that, in addition to the loans, the recovery is linked to measures such as the elimination of restrictive procedures for residents abroad and the reduction of up to 50% in fees and tariffs for the Real Estate Registry.
Investors are returning and record figures are projected
Another significant change is the return of real estate investors , driven by the revaluation of real estate income and the stability of the exchange rate. According to the specialist, “this year the income reached 5.6%, when just 20 months ago it was practically zero.”“The first half of the year was marked by expectations about the new government's policies. However, the launch of mortgage loans, a more defined economic outlook and the implementation of the money laundering system significantly boosted demand in the second half of the year,” said Puebla.
Looking ahead to 2025, projections are optimistic and mortgage lending could triple .
Estimates predict a record market if current trends continue and money from money laundering begins to flow in . “If just 20% of the USD 23 billion externalized is allocated to the real estate market, we would be talking about figures that would exceed everything that was achieved in 2024,” said Braña.
The change of government restored confidence and reactivated investment in real estate despite the exchange rate restrictions. The number of deeds exceeded the 64,000 transactions recorded in 2011, and it is expected to reach or even exceed that level during 2025.
Current conditions are different from the bubble (which occurs when property prices rise disproportionately with respect to their real value due to speculation or excess demand, and generate an unsustainable market) of 2017-2018, according to Braña, when UVA credits drove a large part of the purchases and prices rose sharply, with an average of USD 2,800 per m2 in CABA between August and the end of 2018.
Reforms such as the elimination of taxes boosted the reactivation of the market (Illustrative Image Infobae)
To avoid similar imbalances, he recommended promoting instruments such as divisible mortgages , which could diversify the options between new and used properties.
Prices have already increased by between 7% and 10% in most areas , while in Buenos Aires neighborhoods such as Núñez and Villa Ortúzar they have climbed up to 15% year-on-year , according to an analysis by Cabaprop, Reporte Inmobiliario, Mercado Libre and the University of San Andrés.
The sector maintains that no additional regulatory measures are necessary to control property market prices.
"The market itself is responsible for balancing prices due to the wide range of available offers and the restrictions that many buyers face in accessing mortgage loans. This would limit excessive increases and maintain organic and sustainable growth," concluded Puebla.
www.buysellba.com
