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The market of properties continues to show signs of improvement and there are several factors that reveal that It is still a good time to invest or take refuge in brick. From the decrease in the oversupply of real estate, the return of mortgage loans, to the reduction of the negotiation margin between the published price and the one at which the sale ends up closing, the real estate world is more heated than ever, with signs that indicate recovery in prices, but that also position it as a market that continues to offer opportunities.
After the price of properties will go through a period of loss of value and will hit a historic bottom, the curve today has been rising since the middle of last year and everything indicates that it will continue to grow. Listed below are some key facts that reveal why it is still a good deal to buy property.
One of the factors that show that the market is reactivating is the price movement. According to the latest Real Estate Radar, prepared by Fabián Achával, CEO of the homonymous real estate company, although the prices of the properties they are on the rise, They fell 33% in nominal terms since 2019 and 45% in real terms.
“They are at 2004 levels and this makes the Argentine brick an opportunity“, assures Achával and adds: “The first to realize this were foreigners who began to consult more and more in 2023”. Furthermore, he explains that prior to 2018 there was no apartment for less than US$100,000, but in recent years “there were many apartments for US$50,000, US$60,000 or US$70,000, so, both per ticket and per square meter value, “There are opportunities.”
With the downward price trend that has taken place in recent years, for a long time the best deal for the brick buyer was to keep waiting. However, since the middle of last year, there is a increasingly evident cycle change: Property prices slowly began to recover and the willingness to purchase increased.
This tailwind is evident in two specific pieces of information: on the one hand, in the publication values, since, according to Zonaprop, they have been slowly rising since mid-2023. Since the change in trend that occurred in June of last year, the accumulated increase in prices is 3.5% (until May 2024). Measured in year-on-year terms, in May Zonaprop registered a year-on-year increase of 4% and in Mercado Libre the increase was 5.4%.
On the other hand, regarding closing prices, there is a key indicator that anticipates the upward trend: the counteroffer margin is increasingly smaller. “Negotiation percentages once exceeded 15% and today they are at 5% or less”, says Achával. In other words, the properties They are sold at a value closer to that originally offered, without giving much room for haggling.
In any case, some experts point out that this upward trend does not occur throughout the city. “In the neighborhoods of CABA where demand is concentrated, values stabilized starting in the last quarter of last year and began to rise somewhat, but This is not extensible to all markets, since did not increase in all neighborhoods”explained José Rozados, director of Real Estate Report.
It is important to highlight that the oversupply of real estate is also on the decline.a factor that could influence the increase in prices: In May, Zonaprop recorded a reduction in stock available of 26.9% in year-on-year terms and, compared to the maximum reached in June 2022, the decrease was 45.4% (according to Real Estate Radar). For its part, Argenprop experienced a drop of 22.1% year-on-year and 3.5% monthly in May. “The stock is reduced due to the increase in sales and, as there are fewer products to supply demand, prices are rising,” says Martín Boquete, director of Toribio Achával.
Also The increase in construction costs plays a very important role in the equation.which grew more than 80% between December and March: impacts new propertiesbut also in other segments, since, when determining the replacement value, it affects the rest of the real estate market.
The resurgence of mortgage loans was another sign of hope for the market, since it empowered demand, which for almost five years did not have the possibility of accessing credit like those offered now. In this sense, Daniel Bryn, head of Invertire, points out: “Each transaction with mortgage credit generates between 1.5 and 2 more real estate transactions without credit”, and explains that it benefits those who needed sell one property to buy without credit, to those who sell and buy something in a well or brand new without deed or to those who buy land to develop.
Rozados believes that will add operations to the market, although only from the second half of the year, when execution in the banks is more fluid: “Although it is very auspicious, in 2024 such a great impact will not yet be felt, although the number of operations will increase.”
“The arrival of mortgage loans had a strong impact on the market and is excellent news, given that a considerable increase in demand for mortgages is expected. properties”, assures Achával, although he adds: “I am prudent, I see an important demand factor, although I do not imagine the boom of 2017/2018, since salaries are barefootthere are important macroeconomic challenges and high inflation.”
In relation to demand, there have been two uninterrupted years of year-on-year growth, one of the longest existing trends in the sector, according to Real Estate Radar. In addition, the report details: “During the first four months of 2024, 11,130 purchase and sale operations were carried out, which represents an increase of 20.8% year-on-year and the highest volume operated since 2019.”
Figures from the Real Estate College, From a June report, they also point out good omens, in relation to market absorption and visits: In April 2024, 4.29% of the offer was written and the number of visits in May 2024 increased on average by 5.36% compared to the previous month. “This is very favorable data, which shows a clear upward trend in the number of property sales. And we believe that this trend will continue to deepen with the help of mortgage loans and the approval of money laundering,” shares Alejandro Moretti, member of the Real Estate College Observatory.
“It is very likely that it will continue to grow, month by month in the interannual comparison it showed growth compared to the previous year and it is most likely that this dynamic will continue, with something additional, given the entry of mortgage credit into the game,” says Rozados. “We are at a level of 60% increase in interannual consultations, compared to 2023,” adds Fabián Achával.
Caballito and Villa Urquiza are among the top 5 most in-demand neighborhoods for purchaseaccording to a Mercado Libre report from the first quarter of 2024 and the values they offer also appear attractive.
In the case of Caballito, the average value of the square meter for the purchase that Zonaprop shows is almost 30% below Palermo (28.9%), another of the most sought-after neighborhoods, but with prices that position it as the second most expensive in CABA. In the case of Villa Urquiza, the values decrease a little less compared to Palermo (22.3%), although the numbers are also attractive.
Another neighborhood that shows promising values is the Buenos Aires Microcenter. “It is an area that I see as slow, but in the coming years there will be business, since there are properties to recycle at less than US$1000/m²,” says Boquete. Furthermore, if it is taken into account that it is within the perimeter where mortgage loans with the lowest interest rate are offered, the area can be converted in the future.
When analyzing the publication values in CABA, there are five neighborhoods that remain on the podium according to Zonaprop data: Puerto Madero leads the market, with an average value per m² of US$5,891. They follow him Palermowith US$3147, Belgrano with US$2868, Nunez with US$2757 and Schoolboys at US$2680.
On the other hand, the five neighborhoods with the lowest prices in the city of Buenos Aires are Lugano (US$976/m²), New Pompeii ($1366), Villa Riachuelo (US$1,446 per m²), Mouth (US$1464) and Forest (US$1604).
