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Why the supply of apartments for sale in CABA has drastically decreased - Infobae
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Por qué disminuyó drásticamente la oferta de departamentos para la venta en CABA
Las razones de ese giro en tiempos de recuperación del mercado y el regreso de los créditos hipotecarios. La variación de los precios
www.infobae.com
July 15, 2024
The reasons for this change in times of market recovery and the return of mortgage loans. The variation in prices.
By Jose Luis Cieri
The peak of the stock of units for sale was recorded two years ago, in response to the change in the Rental Law (Illustrative image Infobae)
In May 2022, there were 163,000 properties for sale in the city of Buenos Aires, of which 90,000 were apartments. On the Zonaprop portal, it was observed that the number of available properties decreased by 26.9% compared to the same period of the previous year ; and on Argenprop the decrease was similar, 22.8%. Compared to the maximum levels reached in 2022, the offer was reduced by 45.4% , according to Radar Inmobiliario, in a work by Fabián Achával Propiedades, which coincides with the result of the Statistical Observatory of the Buenos Aires Real Estate Association, through its Cabaprop portal.
There are several reasons for the drop in the number of apartments for sale . In the first stage, it was due to the decision of many real estate agencies to reduce the number of listings of properties that were overpriced in the face of the increase in the cost of real estate marketing.
Fabián Achával told Infobae : “In a second stage, the owners withdrew the properties from the market when their price expectations were not confirmed. The fall in values also influenced the intention to sell and a precautionary withdrawal of the owners during the electoral period that lasted until November 2023. In recent months, the stock of properties in the residential sector remained more or less stable.”
There are currently around 66,000 apartments available in Buenos Aires.
Source: Real Estate Radar
Increased demand will begin to play a role in this issue, especially if mortgage loans proliferate .
In this way, the lower stock of properties in recent months and the growth in the volume of real estate transactions, made for the best start to the calendar ( last May 4,590 deeds were executed , according to the College of Notaries of Buenos Aires, the most positive in 6 years), reduced the absorption time of the available supply, which remained at 2.6 years in March.
Despite the strong improvement, this value still exceeds that existing during the period of exchange rate restrictions after 2011 (when the average was 1.8 years) and is far from the boom period of operations with UVA credits (when the total stock was sold in less than a year).
Behind the sharp decline in the supply of properties in CABA recorded in recent months, there is another key factor: current prices are perceived as low by sellers, who anticipate an increase in the value per square meter for the next 24 months.
Miguel Chej Muse , coordinator of the Statistical Observatory of the Buenos Aires Real Estate Association, explained how the reduction in the stock for sale affects both buyers and sellers. “Although the supply is decreasing, the number of properties offered at present is very reasonable. The buyer can choose and the seller can sell within appropriate time frames, of course, at the current market prices.”
In this context, the decrease in available stock is not necessarily a bad sign for the sector, because it has contributed to balancing the market.
“Buyers still have options and sellers benefit from a steady demand, allowing for transactions to be made at the right time and at prices in line with the current market,” added Chej Muse.
The Rentals
The sector claims that the repeal of the Rental Law has benefited the sector.This measure managed to lower the price amounts, benefiting tenants, but it also led to part of the sales supply being allocated to the rental market.
Source: Real Estate Radar
Brian Levi , from Century 21 Levi, told infobae that “in addition, the change in price trends from a year ago is positive, especially in the northern corridor, and many people now accept that prices are rising. Properties in CABA were well below the historical price, which is now seen as an investment opportunity.”
The change in government has provided security for property owners and investors, dispelling fears of nationalisation.
In the last 90 days, the supply of apartments for sale decreased by 5%, according to Cabaprop (Adrián Escandar)
“Also, the announcements of new mortgage loans by banks allow many buyers to fulfil their dream of owning their own home. The high cost of construction prevents many developers from starting new works or offering projects, as they fear not being able to fulfil their promises. It is difficult to find houses under construction for less than 2,000 USD per m2,” Levi added.
The reduction in available stock has an impact on the sector, causing prices to rise. For buyers and sellers, having a moving market is positive, since construction represents a significant part of the country's macroeconomic movement.
Source: Real Estate Radar
Fabián Achával added: “The reduction in the stock of properties for sale is excellent news because what disappeared, for the most part, was what was out of price, that is, what was unsaleable. The offer is more refined and a large percentage already has market prices or is in opportunity segments. Let us remember that the prices in real terms are in 2004 values.”
According to Chej Muse, the number of users on the Cabaprop portal is growing month by month. “This generates greater confidence in having properties offered by legally registered real estate agents. The Real Estate Association supervises its registered agents and provides buyers with the security and legal advice necessary for any inconvenience.”
Influence of the economy
Inflation in dollars dilutes savings in cash, which is why sellers tend to put their properties up for sale if they already have a destination for the money (such as the purchase of another property, a trip or a business).
“In macroeconomic terms, the drop in inflation is positive for citizens. However, the fluctuation of the dollar creates uncertainty for buyers and sellers,” they point out in the real estate market.
A three-room apartment averages USD 115,000 in CABA (Photo Courtesy: Mudafy)
“For buyers with mortgage loans, this factor is crucial since the conversion value through the MEP dollar significantly reduces their purchasing power, making the conditions less favorable,” said Levi.
To future
If mortgage lending becomes fully operational, the stock of available properties is likely to decline again, is the expectation in the real estate sector.Achával pointed out: “It is a fantastic time to buy: low prices and lots of supply. There are currently 53% more properties than during the UVA credit period of the Macri government.”
Expectations are positive. In May, 4,590 deeds were formalized in CABA, which implies a year-on-year increase of 35.96% (May 2023 vs. May 2024) and a monthly variation of 26.24% (April 2024 vs. May 2024). In the last twelve months, 43,773 deeds were executed, with a monthly average of 3,648, showing a sustained upward trend.
Chej Muse advised: “To maintain a sustainable market, it is advisable to advertise offers at reasonable and realistic prices. As for buyers, it is advisable not to postpone their purchase decision; if they have the necessary means, they should complete the transaction, as they will be able to buy more square meters than in the future.”
There is also caution in the sector. They observe a positive change in prices that they believe will continue both this year and next. In CABA, 90% of the neighborhoods have already appreciated when comparing the interannual sales values.
Brian Levi concluded: “Argentines have an adaptability to changes like few others in the world. Providing good customer service allows real estate agencies to continue working, especially in a country where there is a lot of informality. We believe that mortgage loans will become a very positive tool for the market and for the user in the medium term.”
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