He construction cost index (CCI) of August, which measures the National Institute of Statistics and Censuses (INDEC), -with the impact of the devaluation- showed an increase of 14.7% compared to the previous month and compared to the same month last year, it rose 131.8%. In this way, it was located substantially above the inflation which marked 12.4% and 124.4% year-on-year in the same period.
Construction fell 5.8% in July: is building still an opportunity?
Likewise, the construction fell 5.8% in July compared to the same month of the previous year, which represents its fourth consecutive drop, as reported by the INDEC and the deterioration in the sector was progressive throughout 2023.
After the pandemic and until the end of 2021, this industry increased significantly uninterruptedly, breaking all records of the main indicators. However, Starting in 2022, inputs increased above the dollar.
“A leveling off began to be noticed and, in recent months, a drop, although from very high values,” he told Ambit Gustavo Weisspresident of the Argentine Chamber of Construction (CAMARCO).
For its part, Jimena Veloz Ruamarketing manager Sika Argentina He highlighted that “although construction in Argentina has experienced ups and downs in recent years, currently, the sector has had a significant resurgence.”
Regarding the INDEC data, Weiss highlighted that there is a process of decline, but that it is not so worrying given that a peak had been registered after the pandemic, as a consequence of the recovery effect, and after this type of dynamics, it is normal let him take a leave.
Post-pandemic there was a strong recovery in the real estate market, although that trend later began to reverse.
What was the reason for the rebound? It turns out that during the pandemic, there was no strong inflation and the gap between the official dollar and the illegal ones was substantial. “Prices had not increased much and those who were lucky enough to have dollars, the exchange rate favored them,” he noted. That generated a small growth boom in the property buying and selling market.
However, Starting at the end of 2021 and during 2022, the scenario changed. On the one hand, the construction inputs increased above the dollar, which stagnated or did not increase as much and the gap began to decrease. Thus, the exchange rate stopped benefiting the completion of operations in the market. And, on the other hand, the rental market became more complex and many owners began to withdraw their apartments and houses from the housing market, as a result of the increase in tourism, which favored the supply of temporary rentals.
At this moment, the situation of the rental market is pure uncertainty, so debate to modify the norm that regulates the sector and the temporary regulation. That, added to the increase in the cost of construction materials, raises questions about whether or not it is an attractive market to invest in properties, both in the purchase and in its construction.
In this political-economic context, is it time to invest?
The majority of the actors consulted agree that it is time to invest in bricks, if you have savings in dollars. It should be noted that the market moves strongly due to investors who have availability of US currency.
For Weis”It is still a good business to build for those who have dollars and can exchange them; and eventually also buy a property“.
In coincidence, Veloz Rua He maintained that although 2023 was a complicated year for construction because activity in general terms is in decline, but from Sika “they are confident that in 2024 there will be growth.”
On the other hand, Germán Gómez Picasso, founder of reportinmobiliario.com, said that whether it is appropriate or not will depend on how the economy is doing after the elections and the policy changes that are promoted. Furthermore, he pointed out that if the libertarian candidate wins Javier Mileidollarization, which is the neuralgic proposal of his government program, It should not have a harsh impact within the sector since it is dollarized.
Despite the drop observed in construction, the highest deciles continue to build private homessince due to the devaluations In the last two or three years the levels were below the average of the last decades.
In turn, this is combined with the number of people who have surplus pesos and put them into construction because it is a way of “dollarize savings“. Besides, Gomez Picasso indicated that the market is taking for granted that a change in management is coming because after the sharp falls in property prices, In the last two months, a recovery in prices began to be observed.