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Are construction costs rising or falling? How much does a building cost in Buenos Aires and what are developers' plans for the future? - Ambito Financiero
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www.ambito.com
March 26, 2026
By José Luis Cieri
How much does it cost for standard construction projects, and why does it climb for premium projects? Real estate market leaders evaluate costs, construction dynamics, and expectations.
Residential construction projects underway in the City of Buenos Aires, in a context where developers are adjusting projects in the face of rising costs and increasingly narrow margins.
Construction costs have once again become the focus of analysis in the real estate market. After several years of significant changes in relative prices, high inflation, and exchange rate fluctuations, the cost of building in Buenos Aires has reached levels that necessitate a reevaluation of projects, profit margins, and business strategies.
Today, the cost of building a home ranges from US$1,350 to US$1,500 per square meter for standard projects, with higher prices for higher-quality developments. In premium buildings, construction costs can easily exceed US$1,600 to US$1,700 per square meter , depending on finishes, location, and level of amenities.
This scenario is generating a significant change in the real estate development business. The economic equation is becoming tighter, while sales prices are not always keeping pace with costs.
“Today the cost is US$1,500 per square meter and trending upward . As long as the dollar remains stable and inflation doesn't stop coming down, the cost will continue to increase in dollars, at the rate of inflation,” he said.
The industry executive believes that the behavior of the exchange rate is a key variable for the evolution of costs.
“If the dollar were to rise, that could slightly improve the cost of construction measured in dollars. However, in recent weeks the opposite has occurred: the exchange rate has remained stable or even decreased, and that has increased the cost in hard currency,” he explained.
He stated: “When the dollar rises, there is usually a sharp decline in investor demand because people get scared. Then opposing effects arise: the project's financial equation improves, but at the same time, the possibility of financing the works with sales is reduced.”
According to developers and builders, the impact is not evenly distributed across different sectors. Some inputs increase more than others, and in many cases, the behavior of the dollar amplifies the final cost when measured in US currency.
Tabakman assessed that this scenario has changed the profile of projects moving forward in the market. “The current context has significantly reduced the margins for real estate development and generated a bias towards the higher, more premium segment, which can justify higher prices.”
Labor is one of the main factors driving the cost of building homes.
Regarding access to new projects, he added: “When you go down to the middle class, people today miss the opportunity to enter into an entrepreneurial venture because salaries have not grown at the rate at which costs have increased.”
Sebastián Orlandi , CEO of the developer Flamma, placed the current value per square meter at around US$1,400 for standard products, although he clarified that the final cost depends on multiple variables.
“If you were to take a picture of the entire building constructed today , the average cost would be around US$1,400 per square meter. But in reality, construction is like a movie because the work is carried out over time and the costs change.”
The businessman emphasized that the current scenario shows greater predictability than in the years of greatest volatility. “The major adjustments have already occurred. The exchange rate, logistics, and fuel saw sharp increases in the past. Today, those factors are clearer, and the price per square meter is moving within a relatively stable range.”
He also specified that the number changes when the project targets a higher segment. “If the building is located at a premium level, the cost can exceed US$1,600 or even US$1,700 per square meter, depending on the finishes and equipment.”
Orlandi warned: “If the cost of construction is added to the cost of the land and the rest of the expenses, the total cost of the project can be between US$2,500 and US$3,000 per m2. That forces us to sell above those values for the business to make sense.”
Due to costs, several construction projects on Avenida Cabildo are progressing at a slower pace than in previous years.
This scenario creates segmentation within the city. Some neighborhoods manage to absorb these prices, while in other markets it is difficult to reach sufficient sales values to justify new developments.
Regarding market behavior, he added: “You can list an apartment at whatever price you want, but in the end it sells for the price the market is willing to pay.”
Tabakman stated: “We need to be much more efficient in the construction system and in the use of inputs. There is also the possibility of importing some materials from Brazil, China, or India when they are cheaper.”
According to the head of CEDU, incorporating new suppliers or technologies can help reduce certain costs, although without completely altering the business's economic structure. "Some inputs may cost less abroad, and that helps, but it doesn't change the overall paradigm or the economic and financial equation of a project."
Similarly, Juan Manuel Tapiola , CEO of Spazios, placed the construction cost between US$1,350 and US$1,400 per m2, with a slightly upward trend.
“The cost in pesos registered increases of around 2% or 2.5% per month, while the dollar showed a decrease. This means that the value measured in dollars is getting closer and closer to US$1,400.”
He also emphasized the significant role of labor in the cost structure. “Over the past two years, labor has been the component that has had the greatest impact on cost increases, even more so than many materials.”
Tabakman analyzed the situation of the financial system. “From the credit side, there doesn't appear to be a strong reaction. Interest rates remain high and mortgage lending is still very restricted.”
Developers need private funding to build; they are still waiting for pre-construction mortgage loans.
In this context, the main source of financing continues to be off-plan sales. Orlandi explained that this scheme remains the central tool for driving projects forward. “Developments are financed primarily with contributions from investors and payment plans during construction. This system allows for a reduced initial down payment and the distribution of payments in installments as construction progresses.”
Some companies are exploring complementary modalities, such as post-possession financing, crowdfunding, or mechanisms linked to the capital market, although still on a small scale.
Premium projects appear to be the most viable in this scenario, since the public with greater purchasing power can accept higher prices.
Tapiola described a market with very tight margins. “The replacement cost has a significant impact on the price because demand doesn't justify much higher values. That has drastically reduced the profitability of the business.”
In this context, real estate development operates on minimal margins, and some projects even operate with virtually no profitability. “The business has become very tight. In some cases, the profit is very low, and in others, we're working right at the cost edge.”
www.buysellba.com
Source:
Baja o sube el costo de construcción: cuánto sale un edificio en CABA y qué horizonte ven las desarrolladoras
Cuánto es para obras estándar y por qué trepa en proyectos premium. Referentes del mercado inmobiliario evalúan costos, dinámica de obra y expectativas.
www.ambito.com
March 26, 2026
By José Luis Cieri
How much does it cost for standard construction projects, and why does it climb for premium projects? Real estate market leaders evaluate costs, construction dynamics, and expectations.
Residential construction projects underway in the City of Buenos Aires, in a context where developers are adjusting projects in the face of rising costs and increasingly narrow margins.
Construction costs have once again become the focus of analysis in the real estate market. After several years of significant changes in relative prices, high inflation, and exchange rate fluctuations, the cost of building in Buenos Aires has reached levels that necessitate a reevaluation of projects, profit margins, and business strategies.
Today, the cost of building a home ranges from US$1,350 to US$1,500 per square meter for standard projects, with higher prices for higher-quality developments. In premium buildings, construction costs can easily exceed US$1,600 to US$1,700 per square meter , depending on finishes, location, and level of amenities.
This scenario is generating a significant change in the real estate development business. The economic equation is becoming tighter, while sales prices are not always keeping pace with costs.
A cost that continues to rise
Damián Tabakman , president of the Chamber of Urban Developers (CEDU), pointed out that the cost of construction continues its upward trend measured in dollars.“Today the cost is US$1,500 per square meter and trending upward . As long as the dollar remains stable and inflation doesn't stop coming down, the cost will continue to increase in dollars, at the rate of inflation,” he said.
The industry executive believes that the behavior of the exchange rate is a key variable for the evolution of costs.
“If the dollar were to rise, that could slightly improve the cost of construction measured in dollars. However, in recent weeks the opposite has occurred: the exchange rate has remained stable or even decreased, and that has increased the cost in hard currency,” he explained.
He stated: “When the dollar rises, there is usually a sharp decline in investor demand because people get scared. Then opposing effects arise: the project's financial equation improves, but at the same time, the possibility of financing the works with sales is reduced.”
Materials and labor
The increase in costs is due to several factors. Over the past few years, construction materials and logistics have seen significant increases, while labor costs have also undergone substantial adjustments.According to developers and builders, the impact is not evenly distributed across different sectors. Some inputs increase more than others, and in many cases, the behavior of the dollar amplifies the final cost when measured in US currency.
Tabakman assessed that this scenario has changed the profile of projects moving forward in the market. “The current context has significantly reduced the margins for real estate development and generated a bias towards the higher, more premium segment, which can justify higher prices.”
Labor is one of the main factors driving the cost of building homes.
Regarding access to new projects, he added: “When you go down to the middle class, people today miss the opportunity to enter into an entrepreneurial venture because salaries have not grown at the rate at which costs have increased.”
A business that's getting tighter every day
The impact of replacement costs is clearly reflected in developers' accounts. With high construction costs and slower sales growth, profit margins are significantly reduced.Sebastián Orlandi , CEO of the developer Flamma, placed the current value per square meter at around US$1,400 for standard products, although he clarified that the final cost depends on multiple variables.
“If you were to take a picture of the entire building constructed today , the average cost would be around US$1,400 per square meter. But in reality, construction is like a movie because the work is carried out over time and the costs change.”
The businessman emphasized that the current scenario shows greater predictability than in the years of greatest volatility. “The major adjustments have already occurred. The exchange rate, logistics, and fuel saw sharp increases in the past. Today, those factors are clearer, and the price per square meter is moving within a relatively stable range.”
He also specified that the number changes when the project targets a higher segment. “If the building is located at a premium level, the cost can exceed US$1,600 or even US$1,700 per square meter, depending on the finishes and equipment.”
The development equation
When the cost of construction is added to the value of the land, financial expenses, taxes and the commercial structure, the total cost of the project rises considerably.Orlandi warned: “If the cost of construction is added to the cost of the land and the rest of the expenses, the total cost of the project can be between US$2,500 and US$3,000 per m2. That forces us to sell above those values for the business to make sense.”
Due to costs, several construction projects on Avenida Cabildo are progressing at a slower pace than in previous years.
This scenario creates segmentation within the city. Some neighborhoods manage to absorb these prices, while in other markets it is difficult to reach sufficient sales values to justify new developments.
Regarding market behavior, he added: “You can list an apartment at whatever price you want, but in the end it sells for the price the market is willing to pay.”
The search for efficiency
Faced with high costs, companies in the sector are intensifying their search for efficiency to improve the economic equation of the projects.Tabakman stated: “We need to be much more efficient in the construction system and in the use of inputs. There is also the possibility of importing some materials from Brazil, China, or India when they are cheaper.”
According to the head of CEDU, incorporating new suppliers or technologies can help reduce certain costs, although without completely altering the business's economic structure. "Some inputs may cost less abroad, and that helps, but it doesn't change the overall paradigm or the economic and financial equation of a project."
Similarly, Juan Manuel Tapiola , CEO of Spazios, placed the construction cost between US$1,350 and US$1,400 per m2, with a slightly upward trend.
“The cost in pesos registered increases of around 2% or 2.5% per month, while the dollar showed a decrease. This means that the value measured in dollars is getting closer and closer to US$1,400.”
He also emphasized the significant role of labor in the cost structure. “Over the past two years, labor has been the component that has had the greatest impact on cost increases, even more so than many materials.”
How are the works financed?
Financing is another critical issue for the sector. Mortgage lending remains limited, and interest rates are too high to stimulate demand.Tabakman analyzed the situation of the financial system. “From the credit side, there doesn't appear to be a strong reaction. Interest rates remain high and mortgage lending is still very restricted.”
Developers need private funding to build; they are still waiting for pre-construction mortgage loans.
In this context, the main source of financing continues to be off-plan sales. Orlandi explained that this scheme remains the central tool for driving projects forward. “Developments are financed primarily with contributions from investors and payment plans during construction. This system allows for a reduced initial down payment and the distribution of payments in installments as construction progresses.”
Some companies are exploring complementary modalities, such as post-possession financing, crowdfunding, or mechanisms linked to the capital market, although still on a small scale.
What kind of projects are moving forward
With high costs and limited funding, the type of product that is developed also changes.Premium projects appear to be the most viable in this scenario, since the public with greater purchasing power can accept higher prices.
Tapiola described a market with very tight margins. “The replacement cost has a significant impact on the price because demand doesn't justify much higher values. That has drastically reduced the profitability of the business.”
In this context, real estate development operates on minimal margins, and some projects even operate with virtually no profitability. “The business has become very tight. In some cases, the profit is very low, and in others, we're working right at the cost edge.”
www.buysellba.com
