As a result of all these causes, a process of reappraisal of the properties for sale is taking place with losses, ranging from 30% to 45% of the historical values. This situation is due to the fact that buyers have managed -based on making aggressive offers-, that the prices of the properties that are actually sold on the market enter into a competition to captivate the few existing buyers and, for this reason, the owners determined to sell their real estate begin to accept that the markets indicate that the value of their property is less than the amount at which it was acquired or at which it was historically quoted, and consequently they understand that the only way in which the property can be sold is by lowering its value.
While this news sounds very bad to homeowners, it really isn’t. Those who sell their property today can buy a higher value asset with savings greater than the loss they suffered in the sale price; Those who decide to build a new work will pay half the price per m2 built of what they would have paid four years ago; and those who wish to buy a registered personal property -car, motorcycle, boat, etc.- with its value anchored to the official dollar will also have savings of almost 60% of what they would have paid before. It can also be a good business to enter into a real estate development in a well, with payments in installments in pesos updated by the index of the Argentine Chamber of Construction, progressively changing the dollars needed to pay said installments and within 24 months sell the finished property and recover the dollars invested plus the profit.
Who does it hurt to sell right now? To the owner who sells and keeps the dollars under the mattress, who will also suffer a depreciation of the dollar of 9% per year, as a consequence of the devaluation of the currency, due to inflation in the United States. I advise that owner to rent his property and, in three years, when the lease expires, put his property up for sale. In our country, the value of real estate, in the last 40 years, only dropped three times (1982, 2002 and from 2020 to today) and rose 16 times, naturally the values will recover.
The other good news is that we are at the bottom of the market value of real estate in Argentina. Real estate prices in a medium term –two to three years- will begin to recover. There are reasons to justify this statement: first, the replacement cost is already higher; secondly, the value of the m2 built, both in labor and in terms of materials, is constantly rising.
Signs of recovery in property values are already beginning to be seen. This increase is not general, but we see it in brand-new properties that are in good locations, as well as subdivisions or closed neighborhoods or countries that are sold in pre-sale at tempting prices, but those that are already consolidated or in development are especially successful. those that remain few lots for sale, as well as the lands that have a profitable municipal feasibility, which allow the construction of an apartment building of more than 20 functional units in horizontal property in the most sought-after locations in large cities.
It is very important that those who buy real estate in which all the steps have yet to be concluded to have the transfer deed of ownership of their functional unit or their assigned lot, consult previously with a registered real estate broker and/or with the notary public designated before to move forward with the signing of a bill of sale, in order to avoid situations of legal uncertainty or risks in the equity investment made.
In our country, Argentines are lovers of real estate investment, due to the certainty it provides, the tangibility of the investment and the fact that in many cases unbeatable returns have been achieved in dollars. Also, As we have historically suffered from cyclical economic processes, today we find ourselves in a macroeconomic crisis, but I am sure, based on what has happened in the last 40 years, that the real recovery will come.
For this reason, at this moment there is a unique situation in the world, where properties have risen and there has been a post-pandemic real estate sales boom. The same does not happen in Argentina and real estate prices offer us opportunities that will not be repeated in the next 10 years. It is an unbeatable time to buy real estate, dollars as a safeguard of value are depreciating, real estate will appreciate and today we can buy them at the lowest price. There will be no better time, the brave will have their reward and the conservatives will regret it.
President of CAMESI (Chamber of Real Estate Services Companies), President of Keymex Argentina, lawyer, notary public and real estate broker.
Source: Ambito
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