In this context, given the perceived plateau in prices, after several months of decline, many potential investors are beginning to wonder whether or not to buy a property at this time and if it is a good stage to sell.
Properties: should you buy or sell?
Marta Liotto, president of the Sole Association of Real Estate Brokers of the City of Buenos Aires (CUCICBA) comments to Ambit that, “during the past year, the market continued to be hit hard, deepening the trend that it had been showing since the current Rental Law began to be applied.” And, facing this 2023, he warns that the delay in advancing in the necessary changes in the Law complicates the situation more and more.
And it is that, as the real estate businessman Armando Pepe points out, “this will be a very complex year because it is an electoral period”, with a dollar that is rising and inflation that is not clear at what level it will be.
However, it acknowledges, as indicated in the Zonaprop report, that “the values stopped falling, how it had been happening last year and the previous one and they seem to have hit a floor ”. However, he points out that the one that sets the prices is the Law of supply and demandso we will have to see how that equation evolves in the future.
A clue in this sense that Pepe mentions is the data from the College of Notaries that some 4,000 deeds were completed in December, but he warns that not all are sales because many correspond to donations and others are from buildings that began to be built a long time ago and now they are written. Thus, he indicates that, although “we have to see how the market will evolve”, some imply that we could continue to see a rebound in sales prices.
Prospects for the real estate market
One of them, according to the president of the Argentine Real Estate Chamber (CIA), Alejandro Bennazar, is that “market profitability rose a lot because the value of properties fell and rents rose a lot.” For this year, he expects that rate to be between 3.6% and 5%.
And the numbers seem to be well projected, since the data from the Zoneprop Index reveal that the price/rent ratio, at this time it is 4.12% per year. “Rentals are becoming attractive again and that improves the prospects for buying and selling properties,” describes Bennazar.
This occurs in a context in which, as he points out, there is a very large stock of properties on offer. Faced with this situation, the sectoral representative assures that “one is beginning to notice a improvement in results of the last four months and that is leading to a plateau in prices at the beginning of this year”.
Thus, for Pepe, the current values, which range from US$1,016, in the cheapest neighborhood of CABA, which is Lugano, to US$5,600, in the most expensive, which is Puerto Madero, are a great buying opportunity, today. In the same sense, Bennazar anticipates that “the buyer who makes an operation in these two summer months will begin to see an upward trend in prices once the strongest economic activity begins.”
It provides, in this sense, that “2023 is going to be a pivotal year for the market and then there will be a recovery in 2024”and is that he thinks that it is very illogical that some mid-range or high-end cars are at values similar to that of a department, for example.
While both agree that not the best time to sellalthough many homeowners are willing to do so. “The one who sells at this moment, is because he needs to do it, either because he wants the liquidity for another investment in the country or abroad, or to save the money,” Pepe points out.
On the other hand, Bennazar points out that the launch of laundering and the possibility that new lines of credit will continue to emerge open up a very good possibility of growth and development as well. And, that is beginning to be felt in real estate, where he assures that “we are having a summer with many price inquiries, even despite the upward trend seen in the exchange market.”
Pepe also sees an opportunity in this initiative, but considers that “it still does not have a clear regulation, so it is difficult to know how it will influence the dynamics of the sector.” To which Liotto adds the need to advance in the modifications to the Rental Law as another determining element for the prospects of the real estate business.
Consequently, all sectoral representatives agree that It is a good time to invest in properties in the City of Buenos Aires because they consider that prices could have hit a floor after months of falling. However, everything will depend on how the exchange rate evolves and the effect that this year’s electoral dynamics have on the economy, as well as which path the rental market takes this year.
Source: Ambito
