Construction costs in Argentina have fallen sharply since 2008 prompting developers and consumers to take advantage of the lower cost environment and move forward with residential and commercial projects.
The Cost To Build In Dollars Is The Lowest In Six Years is the headline of Patricio Eleisegui’s analysis in iProfesional which describes new construction as an attractive niche in an otherwise frozen landscape of real estate market activity.
“The average construction cost per square meter in Argentina today is $9,200 pesos which is US$1,100 per square meter at the official rate or only US$620 at the blue rate (US$58 per SF). This has given an incentive to many who have dollars stashed in the mattress to build their own home, exchanging their dollars in the informal market at an exchange rate close to $15 pesos per dollar,” explains Eleisegui.
The Reporte Inmobilario data shows the current average construction cost of US$620 per M2 is now 33% below the US$940 per M2 (US$87 per SF) recorded back in 2008 and 43% below the recent peak of US$1,089 (US$101 per SF) reached in 2011.
“Analysts in the sector agree that a cost reduction of this magnitude is viewed as a great opportunity for those with dollars who have been thinking of building now to sell later. They believe these investors can capitalize on two situations: one being the turnaround that will eventually happen in the Argentina real estate market (either next year or after the presidential elections), and secondly for the permanent appreciation of these types of developments,” writes the author. (Full Story in Spanish)
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