What happened in the real estate market in 2020 and what can you expect for 2021? The fall in prices is one of the trends seen last year, along with increases in rental values, after the law was enacted. But Mercado Libre and the University of San Andrés also found other keys to what was seen in 2020
According to the work, the pandemic changed habits and proposed living differently: renting before buying, open spaces and fewer amenities are some of the conclusions.
The 5 major trends that the study revealed are in the real estate market in the metropolitan area of Buenos Aires (AMBA) are:
Sales price drop in real terms
On the one hand, strong falls in the sale price in dollars per square meter. In AMBA, the value for the sale of houses and apartments fell 6% and 8% respectively, compared to 2019. The municipalities that registered biggest drop year-on-year in the sale price of houses were Pilar (with a decrease of 30%); Tigre and Escobar (15%); José C. Paz (10%) and San Fernando (7%).
A very similar situation is observed in the City of Buenos Aires (CABA), with drops of 6% year-on-year for houses and 7% for apartments. The neighborhoods that suffered the greatest interannual drops per square meter in apartments for sale were San Telmo, with a 14% drop; Villa Ortúzar, with 13%; Constitution, with 12%; Núñez, with 9% and Parque Avellaneda, with a drop of 8%.
Rentals above inflation
A second point that the report highlights is that rents increased more than inflation. In contrast to the situation that occurs for the sale, the real price of rents increased considerably compared to December 2019.
The year-on-year increase for houses was 120% and 31% in AMBA and CABA respectively, and 17% and 11% for apartments in both districts correspondingly.
The municipalities of AMBA that had the highest increases in house rental prices were Pilar (252%), Escobar (251%), Vicente López (172%) and Tigre (170%).
In the case of apartment rentals in CABA, the neighborhoods that had the highest interannual increases in constant prices were Villa Pueyrredón, with an increase of 24%; Villa Devoto and San Telmo, with a rise of 19%; Villa del Parque (18%) and San Cristóbal (16%)
Revaluation of open spaces
The third point highlighted by the analysis carried out by the University of San Andrés, with data from Mercado Libre, is that there is greater interest in open spaces and outdoors. If the pre-Covid period (from January 2019 to March 2020) is compared with the pandemic (March to December 2020), it is observed that the increase in the rental price of houses in AMBA without uncovered surface was 19%, while the rent of the same properties with open spaces increased 46% in the same period. This is because users searched for properties with a park or terrace.
Devaluation of amenities
The amenities and common spaces are not in demand. Comparing again the pre-Covid period with the pandemic, the price of rentals without amenities (swimming pool, gym and multipurpose room) increased more than those with these services.
For example, in the case of apartments without a pool, the increase was 60% higher compared to apartments with a pool. At the same time, prices from March 2020 appear to be less influenced by this type of common space, measured through correlations between the ownership or not of common services and the prices of apartment rentals.
Demand for larger spaces
Despite the scarce supply in AMBA, the rental demand led during 2020 with an interest rate of 52%. Except for the first weeks of quarantine where a sharp drop was observed, 2020 was marked by the prevalence of rents. In practical terms, a rental post received 14.5 times more visits than a sale post.
Regarding the type of property, an increase in the demand for houses was observed. Thus, the demand for houses has an annual average of 41%. However, departments continue to lead demand in AMBA by a wide margin, mainly in CABA.
Paula Margaretic, research professor at the University of San Andrés, said that when comparing the interannual variations of the sales prices calculated on the stock of current ads and the same prices calculated only considering the new publications in a given month, they observed that the falls in the sale prices of the stock of houses and apartments in AMBA have been more pronounced (-7% and -9% respectively against December 2019) than the falls in the prices of new publications (6% year-on-year, both for houses and for departments). “If this trend continues, this would suggest some stabilization of the real estate market by 2021”, He assures.