From being a supporting actor for a long time, to aspiring to be a marquee protagonist again. The brick aims to be visible again. The spirit of the sector’s leaders is reflected in a survey by the consulting firm Real Estate Report: the degree of optimism with the assumption of the new Government of those consulted is “very high”: 72.4% indicate that Javier Milei’s management will be positive for the real estate market, while, on the other hand, only 14.9% say that it will be “negative.”
Hope is also sustained by the return of mortgage credit – the main obstacle identified in the sample for its operation -: 60.8% believe that “the arrival of this type of financing would be possible with the new management”, while 39.2% responded, on the contrary, that this still “would not be possible”.
The current diagnosis is forceful: 57.6% believe that the situation of the sector “is bad”, 29.5% describe it as “regular”, which totaling both perceptions gives a negative assessment that reaches 87.1%. “Only 9.5% believe that the situation is good,” this survey highlights.
If an x-ray of the item is made, it is worth noting that the value per square meter is around US$1,500, a lower price than what it was able to show some time ago. No wonder: in the last four years it is estimated that properties lost 45% of their value.
Background. “The sector has just gone through the worst years in history. The data demonstrates it: more than four years of declines in values that put sales prices in real terms at 2003-2004 values. Purchase and sale operations were at historic low levels and began to rebound in recent months, due to the low price level that drove investor demand for dollar bills,” he describes. Germán Gómez Picasso, from Real Estate Report.
For the consultant, the “star” product of recent years, since the pandemic, was the ‘suburban’: “People prefer to live in a ‘house’, have greenery, more interior space and places for recreation and sports.” The arrival of technology and teleworking that became increasingly established in the local labor market caused this to gradually become more common. “It is a slow change but it has been happening especially in the northern corridor of Greater Buenos Aires. “I don’t think there will be a return to this global trend,” adds Gómez Picasso.
When analyzing the trends, the expert observes “a strong process of decentralization of cities”, based on statistics: 74% of those surveyed prefer to live in houses, which caused the areas surrounding the main cities to grow. urban centers of the country. “After four years of consecutive declines, two quarters ago they began to show a leveling off and, in some specific premium products, a slight recovery,” Gómez Picasso explains.
For its part, Paula Margareticresearcher at the University of San Andrés, He assures that “it is noticeable that there are some areas that could be showing a possible recovery.” In its case, it points to the market for apartments for sale in CABA as a segment that showed “an upward trend.” “We could also be facing a slight recovery of the apartments in the GBA Northern Zone, since it is observed that the sector became neutral since October 2023, after seven months of being on the decline. For the rest of the markets in the different areas of AMBA, it is not possible to see a clear recovery,” Margaretic explains.
“A ‘rebound’ could be expected in the market for apartments for sale in CABA and GBA Zona Norte given that in recent months no decline has been recorded”adds Abigail Riquelme, assistant at the University of San Andrés. And he expands: “The increase in demand for apartments in CABA and GBA has a positive impact on sales prices.”
Projections. For Alejandro Ginevra, from Ginevra Group, “The outlook for the real estate market is aligned with general macroeconomic expectations.” “If these variables manage to stabilize, a positive year is anticipated for the market and construction”he adds.
Ginevra agrees that “the price per square meter is showing signs of recovery since last October, with consultations and sales formalizations. And, furthermore, the foreign buyer returned.” Brokers observe a diversity in transactions, some seeking to safeguard value and others betting on improvements in the economy in general. “Aggressive offers have given way to more logical closings, in line with the real value of the properties. The foreseeable course of economic policy, especially in the second half, could positively boost the sector, especially construction, a key agent of economic traction”says Ginevra.
Finally, the current rental law remains pending, which is in the process of being repealed: “One of the major problems facing the sector occurs in the residential rental market segment. In relation to the current legislation, by a large majority (86.4% of the survey participants) definitely agree with its repeal,” concludes Gómez Picasso. One of the keys so that the brick can be again.
by Marcelo Alfano
