July 2024 BA Real Estate update
Mortgage and RE sales update for July 2024
Welcome Avatar! Real estate sales volume is picking up in Buenos Aires, and so are prices. Will the FOMO start kicking in as soon as mortgage volume increases and the economy shoots up like a “diver’s fart to the surface”, to use Milei’s analogy? Let’s dig in.
Overview
Looks like the absolute bottom was during the winter months of 2023 (June/July) after 6 consecutive years of price declines.
In general, listing prices are up close to 5.5% YoY, and some neighborhoods are getting close to double digit price increases in USD.
The average sales price for a studio apartment (monoambiente) in Buenos Aires is now $101,280. In neighborhoods like Palermo, Colegiales and Recoleta, this is closer to $105-110k or more for new developments, depending on the area and building amenities.
On average, a one bedroom apartment of 50m2 is closer to $120.3k USD while the average two bedroom, 70m2 apartment costs 165k USD.
Neighborhoods
When looking at the zoning heatmap for average price/m2, the northern corridor of the city (Recoleta, Palermo, Belgrano, Nuñez and Puerto Madero) saw an increase of 7.2% YoY and MoM of 1.2%.
The northeastern corridor (Villa Crespo, Chacarita, etc), is 6% YoY and 1.2% MoM.
For the detailed prices per m2 per neighborhood, the bars look like this:
An interesting detail is the increases on a per neighborhood level, where Colegiales and Palermo really top the list with 9.7% and 9% year-on-year respectively. Chacarita is gaining as well, and my bet is that the strategic location in between Palermo, Colegiales and Villa Crespo will pump Chacarita prices some more in the upcoming years.
The average price/m2 in the city is still hovering around $2,269/m2, with a 4.3% YoY change:
When taking into account USD inflation, m2 prices are still at 2004-2005 levels in Buenos Aires, which leaves ample room for growth, especially if Milei manages to lift Argentina out of the current recession and mortgage volume starts picking up. As of now, mortgage volume is still low, but showing signs of growth.
Mortgage credit lines, including those adjustable by inflation/UVA, saw an increase of 5.4% in June with respect to the stock of $592,793 million of the previous month, accumulating a total balance at the closing of $624,859 million and a year-on-year increase of 45.8% in nominal terms.
Read more about the mortgage credit dynamics and the impact on prices in the short to medium term:
Looking at sales, Buenos Aires saw +36% in real sales compared to the same period last year:
Reminder that these numbers do not include “boletos”, which are the contracts signed for new developments that are still under construction.
Autist note: you can find some additional articles below that shed some more light on Argentina’s real estate market:
Conclusion
It looks like sales are starting to pick up across the board and some neighborhoods are already showing close to double digit m2 price increases compared to last year.
As mortgage issuance accelerates, which is my base case by now, this trend will continue. Buenos Aires is still cheap compared to other metropolitan cities, and m2 prices adjusted for USD inflation are still around 2005 levels, even they’re higher in nominal terms.
See you in the Jungle, anon!
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Great information as always. Our company called the absolute bottom in July. We said we were a month or two away from the absolute bottom and that was the case. Also remember that these official numbers and prices are low. They are just based on official stated prices on the escritura but there are still many people that declare a fake lower price at closing. So you have to take these amounts/prices with a grain of salt. Many are much higher.