South American Real Estate News

Property values in Buenos Aires of small apartments drop up to 25% in USD in value plus there is more on offer than ever before

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There are 152,000 properties for sale in the City of Buenos Aires. More than 70% are departments. The vast majority are of one and two rooms. There is little demand because there are no interested investors due to the low rate of profitability being generated by rental returns.

Month by month, the real estate market breaks a new record. In June, there was a boom of properties for sale, with a total of 152,000 units on sale In Buenos Aires city . More than 70% are small apartments, the vast majority are very small units with up to two rooms. Meanwhile, the values continue to fall and, depending on the neighbourhood, they already accumulate a 25% decline in US dollars.

“Between studio apartments and two-room units accumulate more than 50% of the market total. There’s an oversupply of stock because of the over the construction of small apartments in the last 15 years which was a real boom “described Daniel Bryn of Invertire Real Estate.

The number of properties for sale had a rise in the last month of 2.4% and a year-on-year increase of 32% . “The stock of two-room apartments grew 45% one year in the last year and those with one room had a 32% increase. The total number of departments had an increase of 40% Bryn explained.

In the last two decades, there was a boom of constructions of small units. That is why the vast stock from apartments of less than 50 m2.

Today, it is more difficult to sell these small units than the four and five-room apartments. because, of the latter, there is little built and in fact, there is a shortage. They are highly sought after in the preferred areas. People try to get bigger units in a pandemic, “Bryn remarks.

“Today, a studio apartment is hard to rent. In the 90s, when it was built thinking, on the one hand, investors and, on the other, in young professionals who, with access to credit, could buy a property. Today, that public demand does not exist, “he said. Soledad Balayan, from Maure Real Estate.

In addition, the pandemic put small units in check due to the need for larger spaces with room to spread out. “Today, micro-apartments are not attractive. They are very small spaces, which were intended to young people who came to study from the interior of the country, an audience that does not exist due to the epidemiological context “ Balayan added.

In the real estate for sale market, there are 111,768 apartments, 9,900 PH-type units, 6,200 land and offices, 5,600 houses and 5,400 premises.

“We have almost 9.62 apartments for sale per block. In Recoleta, there are 47; Palermo, 33; Belgrano, 30; San Telmo, 27, to name a few examples “ Bryn stated

PRICES

According to the last Zonaprop report, the average sale price in the City is located at US $ 2,481 per m2. It decreased 1.1% compared to last month.

Sales prices accumulate a decrease of 2.5% in 2021 and 11.4% from the maximum of 2019. Well departments show the most resistance to the price decline in 2021.

The North Corridor is the region with the highest price drop in 2021, around 3.5%. Belgrano decreased 3.7% and Palermo, 3.6 percent.

“By neighbourhood, we have drops of prices of between 15% to 25%. For example, Agronomy, Parque Chas, Boedo and San Cristóbal, those who top the ranking in price drops Bryn summed up.

THE FUTURE

The sector has been going through a deep crisis since 2018 and little suggests that, in the second half of 2021, the scenario will reverse.

The coldest months are coming. There is fear of contagion, of the pandemic. That creates an even more marked stop. And, above, we have the elections. And, although in recent months there was no parallel dollar volatility , the market was not reactivated, “summarized Balayan.

According to the latest report released by the Buenos Aires Notaries College, in April 2021, only 2317 deeds were closed, for an amount involved of $ 21,312 million, a number well below the average in pre-pandemic situations.

Source: La Cronista

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