Why did real estate sales plummet by 27%?

Why did real estate sales plummet by 27%?

The amount of operations in January showed a sharp year-on-year drop and the price sank 11.39% per month.

In his last report of Real Estate Activity Indicators (IAI)he National Statistics Institute (INE) reported that the number of operations of buy and sell in it real-estate market collapsed a 50.23% monthly in January, which meant a year-on-year drop of 26.78%.

To understand why this collapse in activity in the sector occurred, which led to the 2,767 units sold, scope.com spoke with the president of the Uruguayan Real Estate Chamber (CIU), Beatriz Carambula,

The reasons for the drop in the number of real estate sales

The latest data from the INE is that of January, and although according to Carámbula “it is not a very relevant month”, since “it is a month in which people are in another, on vacation, and generally do not have much activity”, The drop did not occur only at the monthly level, but also with respect to the same month but in 2021. How is this explained?

The Base of Comparison Factor

“Year 2022 was really a record in operations, 50,730 were made. It increased 15% in quantity and 30% in amount compared to 2021, which had also been a very positive year,” said the head of the CIU, who also noted that last year the largest number of sales were made in the first semester.

Meanwhile, he explained: “We come from a very dynamic year and we are still very active, but at a slightly lower capable rate. That is why it can be seen that sales fell in January”. In other words, by distorting the basis of comparison from the previous year, reaching historical levels, a negative year-on-year variation is to be expected. “We do not have an activity as intense as that, it is a little more moderate,” added Carámbula.

Interest rates, the dollar and the drought

But in addition, the representative of the Chamber pointed out other factors, such as the important increase in interest rates of the Central Bank of Uruguay (BCU), something that at its discretion “does not help“. In addition, “there is the drought through and real estate prices are going up because the construction price also increased“, he added.

“We also have the effect of low dollar, which is the great challenge: to see what will happen to the dollar. That is what worries the developers who are not launching projects today to see what happens“, Raised Carámbula in turn.

Even so, the president of the CIU announced that this year “it will remain dynamic“, because investors continue to see Uruguay “as a reliable country, with political, economic and legal stability.” In addition, he added: “They see that investment in real estate is safe and attractive, and better than other options on the market . It is a heritage shelter that in turn gives them an income.”

Source: Ambito

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