Argentine Real Estate Prices Challenging Conventional Valuation, Economist Reveals
Buenos Aires – A recent analysis by economist Claudio Zuchovicki is prompting a re-evaluation of how real estate prices are assessed in Argentina, particularly concerning accessibility and future demand. Zuchovicki presented findings that, despite nominal values, properties in Argentina are comparatively more attainable now than in the recent past due to a shift in the relationship between average salaries and the cost of a square meter.
Traditionally, real estate valuation focuses on the absolute price per square meter. However, Zuchovicki’s analysis, incorporating an international comparison prepared by consultant John C. Petti,introduces a crucial metric: the number of monthly salaries required to purchase a single square meter. This reveals a stark contrast to nominal values. While Caracas boasts the lowest square meter value globally at US$50, it requires a staggering 10 months of average salary to acquire it.
Argentina, with square meter values ranging from US$2200-US$2500, currently allows access to property with an average salary of US$1100 - a ratio Zuchovicki describes as making properties “cheaper than when they were cheaper.” This is due to the relative betterment in purchasing power compared to property values. Hong Kong, in contrast, represents the global high with US$26,000 per square meter.
Zuchovicki cautions that the re-introduction of normalized mortgage credit could significantly alter this dynamic, potentially reactivating demand and correcting current distortions within the market. He concludes, “If credit starts, it is another path.”
