The Argentine economic culture is not capricious. It may be tinged with tics and protection exercises, but resisting almost eight decades of high inflation, growth in market regulations and attempts to cap the interest rates offered to savers, led to considering that real estate investment was a coverage. The other, especially after the hyperinflation of 1975, was the dollar in its “bill” version.
history and present. The conjunction of both phenomena (financial regulations with high inflation) also led to the denomination in dollars for sales; from a garage to a house in a gated community, going through studio apartments and lots. However, since the last peak of operations (and values) in the summer of 2018, prices (in dollars) were falling, but slower than demand due to the purchasing power of buyers.
In the study that the University of San Andres (UdeSA) and Free market They are carried out based on the publications in the AMBA since 2017 to monitor prices by location and type of property, this trend can be corroborated. Considering the interannual variations (February 2023 compared to February 2022), There are falls in the price in dollars per square meter of houses of 9.8% in CABA, 5.8% in the North, 7.4% in the South, and 6.9% in the West. In the case of departments, the falls were 7.8%, 4.6%, 3.4% and 6.8%, respectively. In addition, within each zone there were dissimilar behaviors: in CABA, the largest year-on-year drop in the sale price occurred in Villa del Parque (-12.2%). On the other hand, for departments, the largest drop occurred in Parque Avellaneda (-15%). Paula Margaretic, a researcher at the aforementioned university, points out that in recent years, the growth in supply has been accompanied by an increase in demand, but to a lesser extent, which could explain part of the fall in prices. “It is likely that in the face of a downward trend in the accumulated sale price for several years and the proximity of a presidential election, they are generating uncertainty, causing some reluctance to sell (or buy) on the part of market agents.“, Explain.
Investment safe? The disparity in the final value of the areas is also attributed to other factors than in which the inhabitant has no direct influence but which does alter prices in the medium term: for example, security. For Diego Migliorisimanaging partner of Migliorisi Properties, there are areas where security policies are developed with some regularity and which received new private investment for the construction of housing, shopping centers and even offices. “For years, strong price growth was promoted in some neighborhoods, in contrast to others that remain lagging behind,” he says. And he gives Tigre, San Isidro and CABA as examples, but, above all, he highlights the “star” of the sector: Vicente López, with a different dynamic “.
In pesos, for now. In the case of rents, since 2020 the departments registered significant increases, especially in CABA and the North zone. “Although to explain this evolution it is necessary to take into account movements in supply and demand, in this period the proportion of apartments for rent in dollars grew considerably more in CABA and GBA Norte”, highlights Sebastián Einstoss, also from UdeSA. The report shows that, in the last month, this proportion was 48% (GBA North), 42% (CABA), 3% (GBA West) and 5% (GBA South). On the other hand, in houses, 76% of rental notices are dollarized, more than double the average for apartments (34%).
In February there was an interannual variation in the rental price in constant pesos per square meter in houses of 20.4% in CABA, 18% in GBA North, -0.9% in GBA South and -10% in GBA West. And in the case of departments, the increases were 23.7%, 17.7% and 2.3%, respectively.
Cost effectiveness. Given that the blue dollar increased by 77% year-on-year and inflation by 100%, this leads to a drop in the rental price of houses (mostly dollarized) as opposed to the apartment market (pesified).. “The 10-year United States treasury bond rate, the global reference, is between 3.9 and 4%, which is similar to the profitability of an apartment in CABA, less than the profitability of an apartment in GBA Norte and greater than the profitability of an apartment in GBA Sur and GBA Oeste” adds Margaretic. For this reason, he understands that the rise in rates may be affecting the investment decision of some agents who are considering buying a property to put it up for rent and, together with the rise in the domestic interest rate, could affect the profitability required by the local real estate market. , although the mechanism is not direct in a context of uncertainty. For now, the local market already has enough difficulties to add arbitration with international super rates. The clamps and controls, for now, serve as a lightning rod.
