In a scenario in which, last April, a total of 3,636 real estate purchase and sale deeds were registered in the City of Buenos Aires – an increase of 32.2% when compared to the same period in 2023 – and with a balance that in the first quarter of 2024 showed an increase of 20% year-on-year, according to statistics from the College of Notaries of CABA, there is a piece of information that is key and that, without a doubt, helps to correctly choose under which “modality” to acquire a department: with a construction cost for high-rise homes that, measured in dollars (does not include value added tax and other expenses), in May registered a value of 842.24 per m2, according to Real Estate Monitor, in more than 15 neighborhoods of the Capital Federal you can now buy a brand new unit for (almost the) same value as another unit of a well development.
What happens is that In used or brand new properties, the cost does not define prices; However, in a well, in part, yes. The construction process of a building takes at least 30 months, “it contains about 500 budget items with their own dynamics and the resources it receives are not stable nor are the variables used to accurately cover the ‘devaluation’ and inflationary shocks that Argentina has,” describes Santiago Levrio, institutional director of Alianza Urbana. That is why developers “add margins to cover these mismatches and/or project the current value as something fixed.”
That is to say, currently the balance shows that the price per square meter of well projects and brand new apartments are “tying”: Now you can “buy cheap finished properties at old prices,” highlights real estate sector specialist Daniel Bryn.
The logic of why this happens in this way is unraveled as follows: there are developers who have finished apartments who urgently need to sell in order to continue with other works or investors who have entered these apartments and must do the same to be able to carry out other operations or personal matters.
And since these already completed buildings “were built in recent years at a much lower cost than it was or is in the last three months after the jump last November [N. de la R.: el costo de construcción acumula un 30% de aumento en lo que va del año]”The price is that in the case of brand new apartments, they did not increase the list,” Bryn clarifies. The reason? Is that it continues to be a business “because ultimately the average cost they paid is US$600, not US$ s900 or $1,000.”
On the other hand, the person who today wants to build a new building is assuming that, at least, it has a cost per m2 of US$900 and does not have a horizon regarding the next two years of the work as to how much it will cost him. go out.
In Balvanera and Constitución, the price gap between brand new apartments versus units is almost zero
Therefore, Anyone who finds themselves “putting together a price list for a well development is starting with values even higher than that finished apartment.”“Details Bryn. And this occurs in some specific neighborhoods where there is a large supply of brand new apartments.
Brand new vs. well: in which neighborhoods the apartments are worth the same
Thus, in a context of several months of flattened dollars with the gap between the blue and the official dollar that was greatly reduced and inflation in pesos that did not stop, although it decreased in recent months; the construction cost increased significantly compared to 2023 (a year-on-year increase of 264.9% from March to March).
In simple words, “if I have to build the same building that I built last year, before it cost me 10 and now it cost 15. Because if the cost of construction goes up, the price of a building will too,” exemplifies Kevin Savelski, director of Group 8.66.
And in this timeline the brand new well apartments are worth the same, “but in the future the well apartments drag down the price per m2 and those that are brand new will also raise their prices to compete because the former offers more financing.” , Add.
Thus, with a value per m2 that in the City of Buenos Aires reached US$2,243 and has accumulated an increase of 3% since the beginning of 2024, according to a recent survey by Zonaprop, Balvanera and Constitución are the two Buenos Aires neighborhoods where the price gap between brand new apartments versus well units is almost zero: -0.29% and -0.75%respectively, according to data from Inviertere.com.
With the same concept, they are followed by Caballito (-1.54%), Villa del Parque (-1.85%), Paternal (-1.92%), Núñez (-2.24%), Villa Pueyrredón (-2 .43%) and Almagro (2.97%). Although this parity only begins to widen on the side of Villa Ortúzar (-3.04%), Recoleta (-4.72%), Monserrat (-4.76%), Chacarita (-6.62%) and La Mouth (-6.64%); and it continues to stretch for the side of Coghlan (-10.42%), San Nicolás (-10.77%), Nueva Pompeya (-14.67%), San Telmo (-19.51%) and Lugano (- 19.87 percent).
Even with the lowest value, more pit apartments are being sold today than brand new, experts say
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In a process of rising costs where some decide to lose profitability and/or make more efforts to optimize the budget, “the opportunities are better perceived for those who buy off the shelf, but it is select, not massive,” Levrio details.
In brand new apartments, since so much supply has accumulated, “the price has not yet increased at the rate of the wellTherefore, it is natural that the number of transactions will grow today.
Savelski agrees with this point, since many people prefer to pay month by month due to financing options. “But now, with the price per m2 rising and the mortgage loans for apartments that do or do ask you for a deed, that are brand new or used, the tables will turn and they will begin to sell many more brand new or used units versus units from a well. “he argues.
And he predicts that “perhaps those owners of used apartments who bought from an owner with a mortgage loan will turn around and buy an apartment from a well as an investment.”
