In this context, Ambit consulted different specialists in the sector to know the current state of “health” of the real estate sector and to account for whether the purchase and sale prices hit a floor and may be going through a slow recovery.
Mudafy, the real estate portal with advice, made an estimate of the market outlook that anticipates a gradual reactivation. According to the firm, prices seem to be approaching a floor after a period marked by high financial volatility, a shortage of mortgage loans and major political changes that influence the national economy.
“The figures for the real estate sector show not only an increase in the supply of properties, but also a stagnation in values, which generates new expectations for the future”, they highlighted from the real estate portal.
They noted that July was the first time in two consecutive months that more than 3,000 properties were made official since 2018. From the real estate platform they observed that the number of deeds continues to grow in relation to what was 2021.
They also saw that the percentage of people with a real intention to buy, that is, who advance to a visit and make a second or third, increased considerably.
Did prices hit a bottom?
“The strong impact that the offer has had so far on the closing prices means that the bargaining power lies with the buyer”, commented Lucas Diazco-founder & COO of Mudafy.
“What we see today is that there are still neighborhoods, like Recoleta, where there are many very similar properties published. Although property prices are not expected to continue to decline, they do remain at a significantly different level than what was published,” added the executive.
The forecast of the specialists indicates that said rise is a sign that the values of the real estate are maintained and will not continue to fall.
“The current market, which is over 160,000 properties published for sale, a figure that increased between 6% and 15% per month, today has been experiencing a decline, which supposes a kind of ceiling which was reached in terms of real estate for sale at a general level in CABA“, held Daniel Bryanreal estate market analyst.
According to the expert, “we are not far from a ceiling in supply. We are not going to see many more properties for sale than we see today in the neighborhood. That is positive because it gives us a horizon of how many quantities we have to sell and, if we estimate that there are going to be 3,000 to 3,500 deeds for sale per month, that stock is going to be absorbed little by little. We all saw that this was increasing and did not stop, but today we are at a brake, a ceiling, of the number of properties that are going to be sold in Capital”.
In this sense, Santiago Magnínfounder of Deinmobiliarios, pointed out: “Being aware of the limitation that the future is unpredictable, we see a very probable scenario of rising prices in 2023, 2024 and successive years, since great changes take place, from the supply shrinking instead of enlarging and the demand that gets bigger instead of shrinking. This could signal the start of a new uptrend known as a bull market. Let us remember that the last Argentine real estate bull market lasted a five-year period, from the beginning of 2003 to the beginning of 2018”.
To its turn, Martha Liottopresident of the Real Estate Professional Association of the City of Buenos Aires (CUCICBA) told Ambit that the real estate market today is waiting for a possible recovery.
“We are expectant. We come in a fairly hit and punished market. Por the trap, the lack of credibility on the part of the Government. But this is the scenario we have. Already the last year of the Macri government was very difficult for the sector. In the pandemic, the sector had a more than deep crisis. People needed to sell their properties to cover certain financial situations and the values passed a barrier that they had never passed. Real estate prices that today we have more than low. We aim to seduce investors so that they realize that it is the best time to buy real estate”, he analyzed.
“There is a lot of offer and real estate at a good price and touching a floor. The one who has money saved there is no better opportunity than he is to buy. We are convinced that this is the price floor. They won’t go down anymore. There are many properties with very good value. This is the time to start trading and investing”, assured this medium.
Regarding the oversupply in the City of Buenos Aires, he said: “Today there are many properties. We can be above 165 thousand units in CABA, which implies an absolute record given that it always operated between 90 and 95 thousand properties”.
And regarding prices, he considered that they are between 20 and 35% below pre-pandemic values.
While, Jose Rozados, from Reporte Inmobiliario, told Ámbito that the most faithful reflection of the real estate situation is the objective data of deeds of sale that are known monthly. In that sense, he affirmed that they show that there was a greater movement close to 20% higher in these first eight months of the year compared to the same period last year.
However, he noted that “the current number is half of an average year observing a historical series of 30 years”.
“In addition, it should be taken into account that this year’s improvement is being compared to 2021 when there were strong restrictions on activity as a result of the pandemic. It improved but continues to remain within the historical floor of activity levels”, he highlighted.
In relation to prices, the specialist analyzed: “LThe prices of used apartments, which is the real estate product that is sold the most, were reduced from 2018 highs by 35% in CABA, 39% on average over 12 localities that Real Estate Report surveys in the first cordon of the GBA and 40 % in the main cities of the interior”.
“From the point of view of a historical comparison, the values are at nominal prices of 2011 and if the devaluation of the dollar due to inflation is applied, they go back to real values of the year 2007. Without a doubt, in general terms, this should be seen as a very high price level. attractive, however, as evidenced by the deed numbers, the level of sales is very weak. In a context of greater economic-political confidence with these prices, investment demand would undoubtedly be strongly reactivated”, he asserted.
Finally, he said that in the current context, it cannot be said that current prices, always speaking in general, “cannot continue to fall.”
Prices fall 4.3% in 2022
Sales prices in the year decreased by 4.3% and the value per square meter is located at US$2,253. This value decreases 0.5% compared to the previous month and accumulates 17 consecutive months down at least 0.5% each monthaccording to the real estate portal Zonaprop.
“The units in well and brand new are those that fall the least, compared to the general average”, highlighted the report.
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Photo: NA
In this framework, he highlighted that the value of a studio apartment in the City of Buenos Aires is US$97,258. On the other hand, he indicated that a two-room apartment with 50 square meters has a value of US$117,722. And he added that a three-room, 70-square-meter apartment costs US$166,361.
“Four years ago the trend we see today was repeated, 90% of the neighborhoods registered a drop in price,” said the real estate portal.
In that sense, he pointed out that 29% of the apartments for sale in August were revalued downwards in the last six months. And that the discount made rises slightly to 8.4%.
“Currently, there are no signs of reversal of the price trend from the behavior of revaluations,” the report highlighted.
Price ranking by neighborhood
The ranking of prices by neighborhood is headed by Puerto Madero (5,565 dollars/m2), Palermo (2,960 dollars/m2) and Belgrano (2,811 dollars/m2). The cheapest neighborhoods in the city are Lugano (1,076 dollars/m2), Nueva Pompeya (1,483 dollars/m2) and La Boca (1,528 dollars/m2).
Meanwhile, the rent/price ratio fell slightly and stood at 3.69% per year due to the depreciation of the peso. In other words, 27.1 years of rent are needed to recover the initial investment. This value is 21% below what was required a year ago.
“Mataderos and Constitución are the best neighborhoods for investors looking for rent since they have an average return of 4.4% and 4.3% annually, respectively. On the contrary, Puerto Madero and Retiro are the ones that generate the lowest profitability (2.8% and 3.2%)”, the report concluded.
Source: Ambito
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