The real estate sector will close the year with the worst numbers in its history

At real estate they make accounts and confirm that will close 2019 with the worst numbers in its history. Even below 2001 and the years of the exchange rate. The high devaluation, which did not translate into a significant decrease in property prices; the falling credit demand mortgage and the economic and political uncertainty They reduced sales to their minimum levels, with 14 consecutive months of decline in the city of Buenos Aires.

"If everything goes on as before, The projection of writings for all of 2019 is about 30,000. That figure is even below 2001, the lowest level so far, which was 36,000. This is going to be the worst year in history for the real estate sector, "he said. Claudio Caputo, president of the Association of Notaries of the Autonomous City of Buenos Aires.

According to the data of the Buenosairean notaries, the period between 2013-2015 was the lowest in the history of the sector. In those years there were less than 40,000 operations per year, with a floor of 33,706 in 2014.

The period with less activity of the historical series was February 2002, a few months after the 2001 crisis, with 1,557 operations, but had an immediate rebound: between April and May, more than 8,000 operations were registered for those who used the purchase and sale of real estate as a way to circumvent the "corralito".

After those months, the activity was normalized with an average of between 3,500 and 4,000 monthly operations. The best month of the historical series, meanwhile, was December 2007, with 8,500 operations.

As to credits, the best records were in March and April 2018, with more than 2,200 transactions made through mortgages. The opposite occurred just a year later, with dollar escalation and inflation. A little over 200 transactions with mortgage loans are currently closed, a 90% crash compared to the best months.

Why would 2019 be the worst year ever? So far, in the first seven months of the year, some were closed 18,700 operations. Without prospects for improvement, there is no chance of exceeding the 30,000 figure. Very far from the record of the more than 76,000 operations recorded in 1998.

"I think the year will end very similar to what was 2018. I have, today, better expectation for 2020 than what I had a while ago. It is essential that the dollar stabilizes for the market to improve, I think that next year will be much better than the current one, "he said Ariel Champanier, president of the Remax Premium real estate.

According to some representatives of the sector, the restrictions on the purchase of dollars – with a cap of USD 10,000 per month – could put an even greater brake on the activity. However, not everyone agrees, since a large part of the real estate operations that take place today correspond to people who already have the dollars available. Many agree that beyond the restrictions, the brake is set by high property prices, which did not lower enough.

"The restrictions further complicate a situation that was already complex and the amount of transaction should fall. We were already at historical lows comparable to the previous stocks. My estimate is that the amount of transactions in the last quarter of 2019 will be lower than in the previous stocks and that's because prices don't fit", He said Santiago Magnin, owner of the real estate of the same name. "There is no lack of buyers, what is missing are buyers at these prices," he added.

Magnin assured with a "rickety" demand and a growing supply should be given a situation of falling prices. In Buenos Aires city, There are more than 118,000 properties for sale only on the Zonaprop platform, but about 2,600 are sold per month (the average from January to July)

"In a month, only 2% of the stock of properties for sale is sold. This index is at a record low. The owner proposes a list value, but only the buyer validates it. The list values ​​are simple wishes of the owners who, in 98% of the time, are not fulfilled, "he warned.

"I think that 2019 will end up being a little positive year, between the devaluations and what happened after the STEP, the market was completely paralyzed. The few operations that are taking place are of necessity, like a first home. Next year, the market will probably calm down and reactivate, once the country's new economic policies are established. Considering the elections, the end of the year and the holidays we do not see possible changes until March of next year"he pointed out Ivan Chomer, Executive Director of Grupo Chomer.

Possible scenarios for 2020

According to the specialist Matías Celasco Correaresearch manager of the CBRE Argentina company, historically the real estate market paradigm seems to have been dominated by an adjustment in dollar prices due to an exchange rate that did not accompany the rise in inflation. In this way, it raises some possible scenarios for next year.

"On the developers side, the construction price fell sharply after the last devaluation at levels similar to 2008/2009. This fall in the construction cost could generate extraordinary margins on new developments that could be placed at a lower price than market, "he estimated.

On the other hand, he stressed that from the demand side, the liquidation of the real dollar salary and the fall in mortgage loans, make it increasingly impossible to access one's own home. This results in the fact that current prices are not viable for most Argentines.

"The price adjustment to the curve would be the healthiest, because it would clean up macroeconomic imbalances. But the current economic situation presents us with complex scenarios to correct, therefore, the downward price inflexibility seems to continue, above all, because being the real estate the hedge asset preferred by Argentine investors, "he added.