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Construction costs are being recalibrated: materials are falling in dollar terms and the value of unfinished construction has decreased in Buenos Aires - Ambito Financiero
Source:
www.ambito.com
November 10, 2025
By José Luis Cieri
This was confirmed by a private analysis. The rise in the CAC Index against the dollar and the opening of trade are altering the cost structure. Finishing costs are being reduced.
A construction project in the Chacarita neighborhood. Even with prices rising sharply, housing construction remains active in Buenos Aires.
The cost of construction in Buenos Aires is undergoing a restructuring that breaks with the logic of recent months. The relationship between the Argentine Chamber of Construction (CAC) index and the dollar no longer mirrors the same movement, and finishing materials no longer define the ceiling for housing construction costs ( which had climbed as much as 130% in 24 months ).
The process is not due to a single factor but rather a combination of global inflation, changes in local supply dynamics, trade liberalization, real wage adjustments, and decisions related to the pace of ongoing projects. The benchmark supporting the sector at this stage comes from the cost of unfinished construction, which is effectively approaching US$1,000 per square meter, far from the US$1,500 that served as a reference point for much of the previous cycle (until last August).
Santiago Levrio , COO (Chief Operating Officer) of Unbox Devs (Developers), summarized this change with a key point: inflation doesn't only affect Argentina. The CAC (Cost of Assets) takes into account wages and materials, and both components respond to different realities. Wages in dollars show a lag after a cycle of declining domestic purchasing power and reduced economic activity, while materials are linked to supply chains that incorporate international prices and supply constraints.
For Levrio, the key lies in reversing the cost structure. “In 2017, the pressure came from labor costs; today, the pressure is on materials. The opening of foreign trade and the price adjustments have already led to lower prices for ceramic and porcelain tiles, marble, faucets, bathroom fixtures, and aluminum joinery. The premium segment is also showing price reductions because more suppliers are entering the market,” he stated.
Levrio argued that certain electrical inputs are even falling below their historical averages due to the elimination of barriers and certifications that previously drove up costs. Laminated glass maintains a particular position due to safety standards that still limit external competition, but the rest of the system already reflects a new model.
The profitability equation holds true when finishing costs no longer significantly impact the profit margin. Therefore, the first half of a project is now considered more accessible than the second, where distortions related to brand, quality, and scale still exist.
Source: UNBOX DEVS (Developers)
This structural change not only impacts direct costs but also how decisions are made within the sector. When costs fluctuated rapidly and illogically with respect to the dollar or sales value, many projects were postponed. Currently, the recovery of mortgage lending and the expectation of price increases provide a foothold for starting construction.
Levrio considered that "more and more projects are being unblocked every day because the entry value and the potential exit value are beginning to align."
In this scenario, lot prices also fluctuate more proportionally. Neighborhoods with higher demand maintain values close to the high end, but with less variation in expectations between sellers and developers. Negotiations become more rational.
Gastón Pons , from the construction company Deheza, offered his perspective on the project's physical progress. Cost stabilization allows for planning purchases and phases with less uncertainty. Coordination among suppliers is becoming more fluid, and deadlines are becoming more accurate. Pons maintains that the difference between starting a project and postponing it no longer depends on a defensive expectation against the dollar, but rather on the possibility of ensuring continuity and pace. The value per square meter is defined throughout the process, not at a single point in the curve. Construction is regaining its character as a sequential activity, not just a financial safe haven.
Lucángeli elaborated that the market is in a phase where the decision takes on strategic significance. "Cost ceases to be a threat and becomes a manageable variable within a logical framework. Pons agrees that predictability, even relative, activates projects because the business once again depends on execution and not just on expectation."
Cost stabilization makes it easier to plan purchases, schedule phases, and maintain the pace of construction. The difference between starting or delaying a project is defined by the possibility of continuity, not by a defensive reaction to the dollar. According to Pons, "the final value per square meter is built during the process, not in a single decision," he concluded.
www.buysellba.com
Source:
El costo de construcción se recalibra: materiales ceden en dólares y la obra gris retrocedió su valor en CABA
Así lo confirmó un análisis privado. La suba del Índice CAC frente al dólar y la apertura comercial modifican la estructura de costos. Terminaciones recortan precios.
www.ambito.com
November 10, 2025
By José Luis Cieri
This was confirmed by a private analysis. The rise in the CAC Index against the dollar and the opening of trade are altering the cost structure. Finishing costs are being reduced.
A construction project in the Chacarita neighborhood. Even with prices rising sharply, housing construction remains active in Buenos Aires.
The cost of construction in Buenos Aires is undergoing a restructuring that breaks with the logic of recent months. The relationship between the Argentine Chamber of Construction (CAC) index and the dollar no longer mirrors the same movement, and finishing materials no longer define the ceiling for housing construction costs ( which had climbed as much as 130% in 24 months ).
The process is not due to a single factor but rather a combination of global inflation, changes in local supply dynamics, trade liberalization, real wage adjustments, and decisions related to the pace of ongoing projects. The benchmark supporting the sector at this stage comes from the cost of unfinished construction, which is effectively approaching US$1,000 per square meter, far from the US$1,500 that served as a reference point for much of the previous cycle (until last August).
Santiago Levrio , COO (Chief Operating Officer) of Unbox Devs (Developers), summarized this change with a key point: inflation doesn't only affect Argentina. The CAC (Cost of Assets) takes into account wages and materials, and both components respond to different realities. Wages in dollars show a lag after a cycle of declining domestic purchasing power and reduced economic activity, while materials are linked to supply chains that incorporate international prices and supply constraints.
For Levrio, the key lies in reversing the cost structure. “In 2017, the pressure came from labor costs; today, the pressure is on materials. The opening of foreign trade and the price adjustments have already led to lower prices for ceramic and porcelain tiles, marble, faucets, bathroom fixtures, and aluminum joinery. The premium segment is also showing price reductions because more suppliers are entering the market,” he stated.
Low termination costs
The most visible price adjustment is occurring in the finishing stages of this part of the real estate market . There, the first price decreases in dollar terms are appearing, due to trade liberalization coupled with a reduction in the level of concentration among suppliers. Items such as ceramics, porcelain tiles, marble, carpentry, and faucets are moving away from the price peaks of the previous period. The reduction is not uniform, but it is consolidating in the segments where imported competition enters more easily.
Levrio argued that certain electrical inputs are even falling below their historical averages due to the elimination of barriers and certifications that previously drove up costs. Laminated glass maintains a particular position due to safety standards that still limit external competition, but the rest of the system already reflects a new model.
And the gray construction: does it also decrease?
The unfinished construction phase, which includes the structure, masonry, and basic utilities, achieves a different equilibrium. Its current value in dollars is not only lower than in 2017, but also more in line with sales prices in the city. This relationship allows developers to analyze projects with greater predictability, even in a context where the cost snapshot alone does not determine the decision.The profitability equation holds true when finishing costs no longer significantly impact the profit margin. Therefore, the first half of a project is now considered more accessible than the second, where distortions related to brand, quality, and scale still exist.
Source: UNBOX DEVS (Developers)
This structural change not only impacts direct costs but also how decisions are made within the sector. When costs fluctuated rapidly and illogically with respect to the dollar or sales value, many projects were postponed. Currently, the recovery of mortgage lending and the expectation of price increases provide a foothold for starting construction.
Levrio considered that "more and more projects are being unblocked every day because the entry value and the potential exit value are beginning to align."
Distribution of expenses
Architect Mariana Lucángeli , a real estate specialist, added a territorial dimension. The distribution of costs within the construction process is not replicated equally in all neighborhoods or for all building types. Off-plan projects maintain the relationship between land value and construction cost, but the drop in the dollar value of construction work reduces the pressure on that value. The quality and services of the building continue to determine its market position, but the cost curve no longer rises in a straight line. For Lucángeli, this moment allows for a rethinking of architectural design based on efficiency criteria, without sacrificing aesthetics or comfort. Space regains value as an experience and not just as a saleable area.In this scenario, lot prices also fluctuate more proportionally. Neighborhoods with higher demand maintain values close to the high end, but with less variation in expectations between sellers and developers. Negotiations become more rational.
Gastón Pons , from the construction company Deheza, offered his perspective on the project's physical progress. Cost stabilization allows for planning purchases and phases with less uncertainty. Coordination among suppliers is becoming more fluid, and deadlines are becoming more accurate. Pons maintains that the difference between starting a project and postponing it no longer depends on a defensive expectation against the dollar, but rather on the possibility of ensuring continuity and pace. The value per square meter is defined throughout the process, not at a single point in the curve. Construction is regaining its character as a sequential activity, not just a financial safe haven.
Lucángeli elaborated that the market is in a phase where the decision takes on strategic significance. "Cost ceases to be a threat and becomes a manageable variable within a logical framework. Pons agrees that predictability, even relative, activates projects because the business once again depends on execution and not just on expectation."
Cost stabilization makes it easier to plan purchases, schedule phases, and maintain the pace of construction. The difference between starting or delaying a project is defined by the possibility of continuity, not by a defensive reaction to the dollar. According to Pons, "the final value per square meter is built during the process, not in a single decision," he concluded.
www.buysellba.com
