In addition, the drop in the dollar cost of construction materials was stopped, which has a direct impact on the sector.
The construction sector is going through critical times. According to a report by Analytica, the Synthetic Index of Construction Activity (ISAC) for August confirmed that the recovery slowed down. The sector fell 2.9% compared to Julyafter 4 consecutive months of growth. The leading indicators do not reflect a much better situation for September: cement consumption increased 1.4% but the Construya Activity Index fell 5.4% and contracted for the second consecutive month.
Anyway, the growth of building permits was high in July. At the national level +21.9% monthly and +29.2% in CABA. However, in the accumulated annual period they fell 15.6% in the country while they grew 16.2% in CABA, measured in m2 they decreased 14.8% and 19.8% respectively.
Real estate deeds on the rise
The latest deed data reflects a significant proportion of purchases/sales of used properties. In the City of Buenos Aires, 5,297 deeds were registered in August, 7.8% more than in July. In the province of Buenos Aires, the registration of deeds was 10,507, +3.8% monthlythe highest value for August since 2017. This attraction for purchasing real estate is also observed in the evolution of prices per m2 in apartments, which are gaining ground from the lows between 2022 and 2023 thanks to the increase in demand.
There are other factors that contribute to the good performance of the real estate market, although still with a minor impact: On the one hand, the bleach allows, to avoid paying fines, the investment of regularized assets in new real estate projects or with a degree of completion of 50%.
Public Works.jpg
On the other hand, the mortgage credit It grew 14.2% monthly in real terms and without seasonality during September, accumulating growth of 29.4% in the last 3 months. This began to impact the deeds, since the acts carried out through mortgages in the province of Buenos Aires showed monthly growth of 38.8% and 63.1% in July and August. However, the demand for mortgage loans is still low: 39.4% lower than September of last year and 84.4% lower than September 2017.
Why doesn’t construction react like the real estate market?
There is a fundamental factor to explain why construction is in decline. Public works continue without being reactivatedthe main driving force of the sector. Spending on public works contracted 25.6% in real terms in September compared to August and 78.6% compared to September of last year. Transfers to National Roads, which achieved three consecutive months of growth, in September decreased by 17.1% compared to August and by 68.5% when compared to September of last year.
On the other hand, In August, the drop in the dollar cost of construction materials stoppeda trend that has been observed since April. While the CCL dollar contracted an average of 4% in August, the cost of materials in pesos grew 2.1%. The 3.7% drop in the CCL dollar in September marks that this trend has deepened.
Source: Ambito
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