Small unit apartment
After the exchange controls came into force combined with the index of inflation, developers have been focusing in the segment of small properties to provide an offer of more accessible proposals. Constructors had to adapt to the variables of the Real Estate market, trying to sort out all the drawbacks the market presents nowadays, finding options investors may find appealing.
New projects thought for studios or one or two bedrooms apartments in Buenos Aires, mainly building of 7 to 8 stories are in vogue these days. Construction’s rhythm has no decreased that much although is far from going through a vibrant stage. These kinds of units have the advantage of being an accessible investment in country where its inhabitants do not have the possibility of shelter their savings in currencies stronger than the Argentine peso. They also work both as homes and offices, and Argentines are well known for their inclination to invest in “bricks.” Some people invest in renovations.
The cost of the square meter lowered, so it is an opportunity to invest in this activity. Some segments are experiencing moderate movement like small buildings with an area of 2,000 / 3,000 square meters. In specific geographic areas office buildings are currently under construction. There are some advantages when it comes to construction. Since the price of the US$ rose, the cost would have lowered 20% in connection with 2012. But there are also risks, as the sales are not likely to be as profitable as they used to be. The great benefit of constructing is to pay the costs in Argentine pesos, while properties in Buenos Aires are still assessed in US$. And the value of the property is like to rise in the medium to long term. To pay the square meter in US$ cash gives the buyer a good advantage in terms of getting rebates. On the other hand, when it comes to long term projects, the fear of the costs matching the black market’s rates or an inflation spiral is present.
This is quite a complex market in Buenos Aires, so make an efficient analysis is important observe each case separately. Good, realistic budgets and a correct definition of the project are key. Currently the cost of the built work ranges between 5,000 and 6,000 Argentine pesos. A standard construction of a house or a duplex in an average neighborhood is quoted close to 6,000 excluding the terrain, only materials and workforce. A more economic construction may cost around 4,000 Argentine pesos. A high building may have a value of 8,000 Argentine pesos excluding the parcel, which is an accessible proposal. Sustainable construction in the other hand is a trend that has not been as popular in Argentina as in other countries. Maybe in the future, the focus in energy saving and therefore in reducing the costs of basic services will become more important. Belgrano, Núñez, Almagro and Caballito are the neighborhoods with the largest number of buildings under construction.
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