Sharp increase in the number of properties for sale in the City drives prices down

In recent days, the surge in publications of second-hand apartments for sale in the city of Buenos Aires has been surprising. This has been confirmed by Zonaprop and the Unique College of Real Estate Brokers of the City of Buenos Aires (Cucicba). The informed platform Infobae which has 111,500 properties and the entity which brings together 8,000 auctioneers registered in Buenos Aires has a total of 120,000 (among which it includes offices and large houses, sometimes used as demolition land). Experts agree that these figures are increasing and that several reasons justify the large existing offer. Among them, the transfer of many rental properties for sale and the small number of operations, which accumulate new units week after week.

Soledad Balayan, head of Maure Inmobiliaria, said: “We are seeing a significant drop in sales requests, possibly the result of the second wave of Covid-19 infections, fears and restrictions. There are few operations, confirmed yesterday by the latest data provided by the College of Notaries of the City of Buenos Aires. In April, the number of acts fell by 6.2% compared to March ”.

The increase in stock complicates the real estate market which has been punished for more than 2 years by the economic situation, a situation which has worsened since the arrival of the pandemic. The two problems had an impact so much that the m2 values ​​in the different districts also fell.

“The supply of second-hand apartments for sale has increased almost 2.5 times over the past three years, a question that stems from several factors”, pointed to Infobae Germán Gómez Picasso, from Real Estate Report. According to the specialist, it is the owners who decide to withdraw the properties from the rental market, because they consider that having a property on the spot involves them more and more risks and profitability. Many are leaving this business. On the other hand, the change in mentality caused by the pandemic has been confirmed. Teleworking has pushed many families to leave Buenos Aires, they even put their apartments up for sale to buy land or a house in less frequented areas ”.

Also, at that time, there were those who preferred to try to sell a property without connection to the outside to move to one with a terrace or balcony. These factors increase the supply and to this “we must add that the poor economic situation of many Argentines forces them to part with a property out of necessity”, added Gómez Picasso.

Decreasing prices

According to information published by the Real Estate Report, the area where the largest price drop was recorded is Saavedra, with a decrease of 28.4% of the values ​​of the interannual measurement. From May 2020 to today, prices have gone from $ 2,445 to $ 1,750 per m2. Then they follow San Cristobal, with -27.3%, it went from 1940 dollars per m2 to 1,410; Villa Crespo, with -26.2%, from 2365 to 1745, and Forest, with -24.6%, from 1890 to 1425.

“It should be noted that sometimes the prices are accommodating and have increases and decreases, they often vary when we investigate them. These are intermediate neighborhoods, with little premium offer, but if we take Saavedra, and compares it to border areas, Villa Pueyrredón presents $ 1,740 per m2, and Villa Urquiza, 1990, with little difference. Beyond a period of 3 or 6 months, the prices tend to be equal, ”explains Gómez Picasso.

Currently, a two-room, 50 m2 apartment costs an average of 130,000 USD and a three-room, 70 m2 apartment is acquired for an average value of 185,000 USD in the capital.

Leandro molina, commercial director of Zonaprop in Argentina and Uruguay, detailed: “In Buenos Aires, the average price per square meter is $ 2,508, cumulating a drop of 1.4% in 2021. The well apartments are those that show the greatest resistance to depreciation this year, they have fallen by 0.32% and the m2 costs 2,584 dollars. It is followed by brand new units which are down 1.47%, with a price of $ 2,693. Used vehicles are the ones that have decreased in value the most in 2021 (-2.34%) and the m2 amounts to 2398 dollars“.

How to get the problem back on track

In the real estate industry, they argue that, to get out of this situation, ideally there would be a mortgage loan to take advantage of second-hand home purchases, helping those who have savings and reach their income. own roof. Currently, the national government and the sectoral chambers are working on a plan of 10,000 credits which would be adjusted according to the variation of wages.

“We are faced with a very complicated situation because, unfortunately, there are disengagement in the economic sense. We think that where there are more apartments, this is where there has been more construction lately, like Caballito, Barrio Norte or Palermo, ”said Armando Pepe, president of Cucicba.

Another problem is the office situation, where in Buenos Aires there are already 220,000 m2 unoccupied. From the College, being members of the Strategic Planning Council (COPE), they presented a plan to the Government of the City of Buenos Aires to reconvert the Center of Buenos Aires into something similar to the case of downtown of Mexico City, transforming an area that has been depreciated and is now highly valued.

“We plan that corporate buildings with free space can become a youth hostel, university student residences, houses or continue to be offices. The town planning code must be amended. We are working with the corresponding area and with other entities to amend the Civil Code in order to change aspects of the condominium regulations. Another proposal that we are carrying out has been designed in commercial premises, so that business leaders for the next three years pay 50% tax for ABL and gross income, to help boost the activity. It is not easy, but we are doing things for the industry in general to unfold, ”concluded Pepe.

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