Argentine Crisis: the Real Estate Sector approaches 2001 levels
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In July there was an improvement compared to June, but those numbers of real estate sales in the city of Buenos Aires does not reflect the 14 months of consecutive year-on-year decline, a historical cycle similar to what happened after the 2001 crisis, although still far from the exchange rate crisis, during the presidency of Cristina Kirchner, which caused 25 months of falling prices.
Last July there were 3208 operations, according to the Colegio de Escribanos porteño, 18.7% more than in June, but a 27.6% less than the same month of the previous year, when the impact of the April devaluation had already begun to be felt, which meant that fewer people would agree to take out a mortgage, a factor that caused the number of sales to grow to more than 6,000 per month. ie the availability of mortgage’s is crucial to a liquid market.
Thus, from April 2018 a downward trend began that, it seems, will continue. “We’re looking at old data because after the primary election the prospects will be worse.
Until this election on August 11 due to positive polls for the current business-friendly government there was some peace of mind for currency tranquillity, but with the negative results causing a devaluation of the order of 30% makes us think that with this, plus the uncertainty for the main elections in October, the sale numbers for August and September are going to be lower.
For some time dollar values have needed to adjusted so there are more transactions and that was before this shock to the market
According, what little market movement there is comes from the hands of people who do not need access to a credit, which is seen in the increase in the value of the average price which, for July, was AR 6,034,194 (US$137,924 according to the average official exchange rate).
The amount grew 64% in one year in pesos, while in U.S. currency it rose 6%.
Calling attention to the situation, the president of the Colegio de Escribanos porteño, Claudio Caputo, reiterated the request for a concerted table with the State and all the actors linked “to find a way out of this panorama”. “It’s 14 months of consecutive year-on-year decline, something rarely seen in Argentine real estate history,” he said.
According to statistics from the Colegio porteño, which start in 1998, 14 months of loss of operations were recorded between February 2001 and March 2002 and from January 2012 to June 2014, 25 months of decline.
The numbers in the province of Buenos Aires
In the Province of Buenos Aires, the fall in the sale of properties in June was similar in percentage to that of the city of Buenos Aires with a fall of 28.6%. 6,771 deed of sale was recorded compared to the same month of the previous year, in which 9,481 had been registered. The data are detailed from the statistics prepared monthly by the Colegio de Escribanos of the Province of Buenos Aires.
As regards the July-June comparison of the same year, there was an increase of 4.4% in the number of deeds (as of last June 6,487 had been recorded).
Source: La Nacion
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