Marks first year-on-year increase in eight months and raises optimism of a recovery
The number of real estate sales in Buenos Aires City rose 23.6 percent in March, compared to the same month last year, a rare positive sign that could be the first hint of a recovery for the slumped market.
The figures, released yesterday by the Buenos Aires City Notaries Public Association, ended eight consecutive months of decline and raised guarded hopes across the sector that the plunge in sales that had been evident since 2011 may have found its bottom.
Real estate agents, however, remained cautious yesterday, preferring to emphasize that a one-month improvement is not necessarily indicative of a wider trend. Plus, the increase in March comes after one of the worst years in several decades when it comes to sales.
The last time the real estate sector experienced growth in March was in 2010, when the country’s economic activity recovered after the global financial crisis. But five years ago, 4,931 units had been sold in March, which is still almost twice as many as the 2,748 transactions completed in the third month of this year.
“We should wait to see what happens two or three months from now. One month in the real estate market doesn’t mean that much, looking at quarterly or half-year figures would tell us much more,” Germán Gómez Picasso, the director of the Reporte Inmobiliario real estate consultancy agency told the Herald.
Sales in the first three months of 2015 were 2.2 percent lower than the first quarter of last year despite the strong growth in March. This means that 2015 remains the worst year on record since 1998, although a few months of improvement like the one seen in March could quickly turn that around.
Both Reporte Inmobiliario and a survey from the UADE university agreed the market value of property was either stable or moving slightly upward in recent months, which could also be a sign of change. UADE claims prices of new property increased 2.5 percent in Buenos Aires City, while Gómez Picasso told the Herald that may reflect that owners are more optimistic about the future.
“In the last two quarters we’ve noticed that owners decided to stop lowering their prices. They are still not finding buyers, the demand is not yet there, but I think people might be expecting changes in economic policies that could bring about new buyers,” he said.
Real estate agents have complained that restrictions on the dollar trade applied since 2011 hit their market strongly, as transactions are mostly carried out in US dollars.
More investors are also buying plots of land, expecting a quick increase in resale value. This is where the CEDIN bonds for real estate transactions, created as part of a tax amnesty programme, had some effect, Gómez Picasso said. “The CEDIN was better than nothing for the sector, but we still went through the worst period in memory.”
Date: May 7, 2015