The price of the square meter in Buenos Aires showed an ambivalent dynamic in the last semester: it rose 2% in nominal dollars but fell 10.7% in real terms adjusted by inflation in local currency. This is indicated by the last survey of the Latin American Real Estate Market (Rial), prepared by the Finance Research Center (CIF) of the Torcuato Di Tella University together with ZonaProp.
Thus, with a medium value of US $ 2,586 per square meterBuenos Aires was located as the Fourth most expensive city in the regionbehind Montevideo (US$ 3.330), Mexico City (US $ 2,666) y Monterrey (US$ 2.592). The list is completed by San Pablo, Rio de Janeiro, Lima and other large cities in Latin America. At the other end, the lowest prices were observed in Quito (US$ 1.215), Rosario (US$ 1.614) y Córdoba (US $ 1.628).
The report emphasizes that the survey is based on the price requested by the seller, obtained from the classified properties of properties published in the main real estate portals of the fifthandar group – as zoneprop, real estate24 or surplus value. To ensure comparability between cities, middle and middle-upper class neighborhoods are selected, similar to the Buenos Aires neighborhood northern, Belgrano, Recoleta and Caballito.
In addition, the prices relieved are converted to dollars using the average exchange rate of the month and, in the case of Argentina, the MEP exchange rate, considered a free and legal reference. It is worth clarifying that the study was conducted in March, before the government eliminated the stocks and established the scheme of exchange bands. For the analysis in real local currency, an adjustment for the retail inflation of each country is applied, while the calculation in real dollars takes into account the inflation of the United States.
The report highlights a recurring dynamic in high inflation economies such as Argentina: while in dollars the values can be stable or even rise slightly, in local inflation currency can show significant falls. At the regional level, prices rose on average 1% in nominal dollars, but dropped 0.4% in real dollars and 2.2% in real local currency. In the Argentine case, the depreciation of the value of the properties is even more marked: Rosario showed a decrease of 8.5% and Córdoba, 6.6%, in real local currency.
The Rial also analyzes the price distribution within each city, presenting the differences between percentiles. Thus, not only the medium value is observed, but also the lowest and highest prices that coexist in the different neighborhoods. In Buenos Aires, the gap between the 25th and 75th percentile is significant, reflecting a heterogeneity within the same market.
The sample considers only 1 and 2 bedroom units, with surfaces between 20 and 100 m² and values between US $ 10,000 and US $ 300,000. Monitoring or luxury or atypical properties are excluded, in order to capture the most representative segment of the middle urban residential demand.
The survey is published twice a year, in March and September, and seeks to provide a comparable and homogeneous tool that allows to follow the evolution of the real estate market in Latin America.
The fall in real prices in Buenos Aires occurs in a context of high inflation and strong contraction of the mortgage credit, which directly impacts the purchase capacity of the population. At the same time, the stability of dollars in dollars suggests a persistent dollarization of the real estate market, with vendors that continue to set hard currency prices despite the weakness of domestic demand.
Compared to other cities in the region, the report indicates that Montevideo showed a 3.6% drop in nominal dollarswhile Córdoba led the increases with a 6.5% risefollowed by Rosario (4.3%) and Panama City (2.5%). These movements reflect different particularities and different macroeconomic conditions, although the general trend in Latin America was stagnation or slight real fall in prices.
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