Buenos Aires: In one year, the purchasing power of property fell 39% in local currency
It is because the US dollar strengthened more than wages but the price of Buenos Aires properties fell to a lesser extent.
In the past 12 months, the purchasing power of an Argentine salary in terms of buying power has deteriorated greatly according to a recent report from the Universidad Argentina de la Empresa.
The fall was due to the fact that salaries fell in greater proportion to the prices of apartments that are made available for sale.
Regarding the levels of March 2018, the wage index measured in dollars that UADE usually reveals was reduced by 37.8% in the case of the new departments and 39.2% in the case of the used homes.
This huge fall was the result of lower average remuneration in dollars of registered workers in the private sector (39%).
Wages increased but not to the same extent in US dollar terms which is the currency properties are traded in and, furthermore.
The behavior of these variables meant that during the reference month the salary was only able to buy 22.7% of one square meter in the northern area of the City of Buenos Aires, which is a lower proportion than that registered in the same month of 2018 when it reached the 36.5%.
A similar situation was verified for the case of existing homes for which the real salary index in terms of the square meter (ISRV) showed a year-on-year decrease of 39.2%.
In this case, the salary allowed to acquire 25.3% of one square meter of housing, a proportion lower than the 41.7% recorded in March 2018.
In March, UADE revealed the asking prices of some 9,000 apartments published in USD dollars in the city of Buenos Aires.
According to these estimates, the simple average of the asking price per M2 for the set of surveyed neighborhoods was USD 3,726 (-2%) for the new departments and USD 3,338 for the existing ones (+ 0.3% ).
These variations between property prices coincided with an increase in the nominal exchange rate of 104.4%, according to data from the Central Bank (BCRA).
In particular, the values of new departments in Recoleta, Palermo, Belgrano and Núñez showed a variation of -5.3%, 0.1%, 1.7% and -4.2% respectively when comparing March 2019 with March of 2018.
On the other hand, the existing homes recorded the following average interannual variations: Núñez (1.6%), Palermo (-0.6%), Belgrano (0.2%) and Recoleta (-0.04%).