As Argentina ushers in the Milei government, market specialists predict significant changes in the real estate landscape. A survey by Reporte Inmobiliario reveals that over half of market players view the current state as challenging but anticipate a promising future under Javier Milei’s administration.
Here are eight key expectations shaping the real estate market:
1. Property Prices on the Rise: Traditionally seen as a safe investment, real estate values have faced a decline in recent years. However, early signs of recovery are emerging, with a 1.3% increase in prices for
two- and three-bedroom apartments during the last quarter in Buenos Aires. Experts anticipate a significant rebound in property values in the short and medium term.
2. Optimism Surrounding Mortgage Credit: The lack of access to mortgage credit has been a concern, hindering property purchases. Six out of 10 respondents believe that the new government may bring about the return of mortgage credit, positively impacting the real estate sector.
3. Exchange Rate Volatility: The fluctuating exchange rate remains a challenge for the real estate market. The potential dollarization of the economy, a concept from the libertarian campaign, could provide stability and simplify pricing, eliminating complications related to various alternative dollars.
4. Legal Uncertainty: Investors highlight legal uncertainty as a major obstacle in the market. Milei’s emphasis on respecting private property rights aligns with the concerns raised about the need for a
stable legal framework.
5. Repealing Rental Law: The promise to repeal the current rental law is seen as a positive development by real estate developers and investors. Expectations are that this move will lead to increased investments in a sector that had been facing challenges due to rent regulations.
6. Limiting Public Works: The government’s plan to cut expenses, including public works, divides opinions in the market. While some support the measure, others express concerns about potential job losses and its impact on the economy.
7. End of the “Cheap Bricks” Cycle: The private construction sector experienced a period of favorable prices in 2023. Experts suggest that the cycle of affordable construction costs in Argentina may be ending, prompting a sense of urgency in construction processes.
8. Increase in Re-Sales Validates Cycle Change: October recorded a significant increase in property transactions in Buenos Aires, marking the best October in the last six years. This surge in re-sale property sales validates the shift in the real estate market cycle, providing optimism for the industry’s future.
As the Milei government takes charge, these anticipated shifts offer a glimpse into the evolving dynamics of Argentina’s real estate landscape.
