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How many years does it take to recover the property investment?

How many years does it take to recover the property investment?

He real-estate market has experienced ups and downs in correlation with the macroeconomy in recent years, which has generated a considerable impact in the field of rentals.

Despite this scenario, owners who continue to rent their properties have noticed an increase in their profits compared to the previous year. During November, the relationship between the rent in pesos and the value of the property in dollars has grown, reaching 5.6% annually. Therefore, currently, it is required 17.8 years of rent to recover the investment in the propertyrepresenting a 26% less than a year ago.

Several neighborhoods such as Saavedra, Villa Luro and Balvanera offer investors an average return of 6.6%, 6.6% and 6.3%, respectively, while Barracas (4.1%), Monserrat (5.1% ) and Liniers (5.2%) have a lower profitability.

According to an analysis based on Zonaprop ads, rental prices have increased: A 40 square meter studio apartment has a monthly cost of 238,542 pesos; A two-room, 50-meter apartment costs 282,389 pesos per month, and a three-room, 70-meter apartment is valued at 391,261 pesos per month.

Rentals: how the price increased

The rental price has increased by 10.4% in November, accumulating eight consecutive months with increases above 10%. So far this year, has experienced an increase of 204%, significantly exceeding inflation of 146%. New contracts have grown by 220.4% in the last twelve months.

In Buenos Aires city, Palermo is the most expensive neighborhood to rent, with a monthly value of 426,861 pesos. They are followed by Belgrano (426,028 pesos per month) and Núñez (416,735 pesos per month). On the other hand, Barracas is the most accessible neighborhood, with a price of 217,496 pesos per month, followed by Constitución and Floresta, with 240,545 pesos and 262,614 pesos per month, respectively.

In relation to the areas with the highest rental prices, the North Corridor (414,189 pesos per month), the Northwest Corridor (366,161 pesos per month) and the Central Axis (310,291 pesos per month) stand out. While the Southeast (260,001 pesos per month) and the West (257,524 pesos per month) have cheaper rates.

Prices have experienced a monthly increase of 0.2% in November. Since July 2023, a change in the trend has been observed with a cumulative 0.8%. In 2023, a nominal decline of 1.3% was recorded, placing the price 22.5% below the maximum reached in 2019, with used apartments being the ones that have increased their price the most.

As for sales, a 40-square-meter studio apartment has a value of $95.1891, a two-room apartment measuring 50 meters reaches $114,364, and a three-room apartment measuring 70 meters is $158,989.

In contrast to last year, where 83% of the neighborhoods showed a downward trend in their monthly prices, In November 2023, 58% of neighborhoods have shown a monthly increase in their prices.

The volume of deeds in the City in October was 53% higher than the same month last year, with an increase of 22% compared to 2022. The number of appraised apartments has decreased slightly, standing at 20%, while the average discount remains at 7.2%. This factor explains the change in the upward trend registered since July.

Puerto Madero leads the ranking of the most expensive neighborhoods in the City, with a price of 5,690 dollars per square meter, followed by Palermo (2,999 dollars/m2) and Belgrano (2,742 dollars/m2). On the other hand, Lugano, Nueva Pompeya and La Boca are the cheapest neighborhoods, with a price of $996/m2, $1,332/m2 and $1,412/m2, respectively.

Source: Ambito

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