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Construction: the data that worries the sector and the reasons for the increase in cost per square meter with a falling dollar - La Nacion Propiedades
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www.lanacion.com.ar
March 18, 2026
The real impact for the investor is felt in their dollarized wallet; due to the drop in the parallel dollar, the cost per square meter jumped more than US$50 in a month
By Candela Contreras
The dollar's decline pushed the price per square meter upwards.
The Argentine real estate market is experiencing a scenario of stark contrasts, where the construction cost situation is putting developers in a difficult position as they face ongoing increases, albeit at a slower pace than in 2023/2024: the cost of construction rose again in dollar terms at the beginning of the year . Although increases in pesos were moderate, the drop in the parallel exchange rate ultimately pushed the price per square meter , measured in US dollars, upward .
According to data from the Construction Cost Index (ICC) published by the Government of the City of Buenos Aires , in January the cost per square meter increased by 3.3% month-on-month, reaching $1,376,901.50 . If that value is converted to the average blue dollar exchange rate for that month, which was around $1,505, the result yields a cost close to US$915 per square meter .
A month later, the index showed another increase. In February —the last month surveyed— it rose 1% compared to the previous month , and the cost per square meter reached $1,391,033 , while the unofficial exchange rate for the dollar was around $1,435. With that exchange rate, the construction cost settled at around US$969 per square meter .
In practice, this means that construction costs increased by about 6% in dollar terms in just one month , even though the increase in pesos was much smaller . The explanation lies in the exchange rate: when the dollar falls or remains stable while costs in pesos rise, the cost of construction measured in foreign currency tends to increase.
There's a key piece of information that often goes unnoticed: the construction cost figures compiled by the City of Buenos Aires don't include the value of the land or a series of items that, in practice, are unavoidable. Taxes, professional fees, marketing, and the developer's profit are not included, which leaves that number quite far from the actual cost of a project .
“When you add up everything that isn’t in the index, the number changes scale,” summarizes Juan Manuel Tapiola, CEO of the developer Spazios. And he details three factors that explain this gap:
With these adjustments on the table, the numbers change. According to developers consulted by LA NACION, building an "affordable" home starts at around US$1,500 per square meter (more than $2 million at the current exchange rate). At the other end of the spectrum, a higher-end property, with premium materials and finishes, can climb to US$4,000 per square meter (almost $6 million).
This indicator is closely followed by developers and investors in the real estate sector, as the value per square meter of construction is consolidated as one of the variables that directly impact the dynamics of real estate prices and the decisions of both developers and individuals who are evaluating building.
Thus, the Argentine real estate market is experiencing a scene straight out of a movie, with two simultaneous and contradictory endings. While the residential sector reached record highs in deeds in the last year, driven by the return of UVA mortgage loans, construction is lagging behind .
The data is compelling: in 2025, the mortgage-to-deed ratio exceeded 15%, doubling the average of the last five years and reaching its highest level since 2018. This is a significant shift from the almost absolute predominance of cash payments that characterized the 2019–2023 period, when credit was practically nonexistent.
In numbers, 2025 ranked as the fifth best year in 27 years. It closed almost meeting market expectations with 69,461 deeds signed in the city of Buenos Aires —70,000 were expected—: 26.8% more than 2024, which closed with 54,770 transactions, according to data from the Buenos Aires Notary Association.
Of the total number of deeds, almost 14,000 were mortgaged. That is, nearly 20% of the total were purchased with a mortgage, representing a 180% increase compared to 2014. Despite these figures, it wasn't enough to reach the boom that occurred between 2017 and 2018, when UVA loans boosted the real estate market, reaching 16,000 mortgaged deeds.
The market is selling existing stock, but the replenishment of new units is progressing at a slower pace. Ricardo Pristupluk
This change in climate was also reflected in prices. According to the BBVA Research report on the real estate and construction situation in Buenos Aires (CABA) leading up to 2026, all three segments (off-plan, new builds, and used properties) showed year-on-year increases ranging from 5% to 11% during 2025. This trend was more sustained and less dispersed than in 2024. It represents a gradual recovery, without abrupt jumps, but enough to ensure that the bottom has been reached .
“The report confirms a shift in the dynamics of residential real estate : greater macroeconomic stability and the return of mortgage lending have allowed demand to recover and the market to regain depth. Looking ahead to 2026, the challenge will be to sustain this momentum without sacrificing accessibility, in a scenario where the fundamentals of the upward cycle will appear more robust,” noted Mario Iparraguirre, senior economist at BBVA Research Argentina.
But the biggest question mark over its future lies in construction . Between the end of 2023 and the third quarter of 2025, the national GDP (Gross Domestic Product) accumulated an improvement of almost 2%, but construction was the hardest-hit sector, suffering an 11% contraction . “The sector was left out of the recovery cycle, contrary to the trend of services and primary activities,” explained the survey, which used official data from the National Institute of Statistics and Censuses (INDEC).
On this last point, the document warns that the contraction of public works significantly reduced state funding for the sector, leaving private investment as the main driver . The problem is that this engine is still operating at half capacity. Building permits and material shipments remain below pre-pandemic levels, although 2025 saw a slight recovery in authorized surface area and an increase in the average scale of projects, reflecting the progress of larger-scale developments. In other words: fewer permits, but larger ones.
“The construction sector reacts with greater sensitivity and lag to the macroeconomy,” Manuel Valdes, Commercial Director of Criba, explained to LA NACION . “Even if GDP improves, investment depends on long-term expectations and predictability . Today, the priority is to plan prudently and secure contractual backing before starting new phases.”
The decline in public works left private investment as the sole driver of activityHernan Zenteno - La Nacion
For Valdes, there's an "elephant in the room" that no one wants to mention: the tax burden . "Without a profound tax reform that complements labor reforms, it will be difficult to regain momentum, especially in middle-class projects, which are the ones that suffer the most from the weight of cumulative taxes," he warns.
This lack of dynamism is reflected in a statistic from the report based on data from the National Institute of Statistics and Censuses (INDEC): asphalt is the only sector experiencing growth, while brick and concrete construction remain stagnant. The market is becoming more demanding, with only large-scale projects and solid financial structures moving forward, leaving small builders unable to absorb the costs behind.
For Damián Tabakman, president of CEDU (the Chamber of Urban Developers), the current scenario requires a much more sophisticated analysis than in the past. “ Before, those who entered the market without prior experience did well because the numbers were plentiful. That's no longer the case,” he states.
Tabakman warns that, while politics and the dollar seem to be offering a respite, the combination of high costs and stagnant prices necessitates reinvention : “The developers with the best understanding of the market will win. This doesn't just mean the premium segment; it's for those who manage to find a distinctive product, with disruptive strategies and financing options.”
According to Valdes, the sector is still in a phase of absorbing excess inventory. “A clearer recovery could begin in 2026 if stable macroeconomic conditions are consolidated and access to financing improves,” he states, although he again emphasizes the need to review the tax structure.
The fundamental question is whether this decoupling is temporary or structural. The BBVA Research report suggests that the “invisible” construction boom could begin to emerge in 2026 if two conditions are met : consolidation of mortgage lending to finance demand and a decrease in funding costs for businesses . If credit not only drives deeds but also pre-sales and launches, the cycle could be completed.
Furthermore, bank financing should play a central role . In 2025, mortgage lending recovered, but still represents only 0.5% of GDP. “The Argentine financial system has the capacity and the challenge to expand its reach, as in other economies in the region, to channel savings towards housing and support more inclusive and sustainable real estate development,” the analysis states.
The biggest challenge this year lies in the construction sector, which began with low activity, fewer projects, and tighter margins. Recovery will depend on private construction, the cost of financing, and the reactivation of public works projects.
www.buysellba.com
Source:
Construcción: el dato que preocupa al sector y las razones de la suba del costo por metro cuadrado con un dólar que baja
El impacto real para el inversor se siente en el bolsillo dolarizado; debido a la baja del dólar paralelo, el costo por metro cuadrado saltó más de US$50 en un mes
www.lanacion.com.ar
March 18, 2026
The real impact for the investor is felt in their dollarized wallet; due to the drop in the parallel dollar, the cost per square meter jumped more than US$50 in a month
By Candela Contreras
The dollar's decline pushed the price per square meter upwards.
The Argentine real estate market is experiencing a scenario of stark contrasts, where the construction cost situation is putting developers in a difficult position as they face ongoing increases, albeit at a slower pace than in 2023/2024: the cost of construction rose again in dollar terms at the beginning of the year . Although increases in pesos were moderate, the drop in the parallel exchange rate ultimately pushed the price per square meter , measured in US dollars, upward .
According to data from the Construction Cost Index (ICC) published by the Government of the City of Buenos Aires , in January the cost per square meter increased by 3.3% month-on-month, reaching $1,376,901.50 . If that value is converted to the average blue dollar exchange rate for that month, which was around $1,505, the result yields a cost close to US$915 per square meter .
A month later, the index showed another increase. In February —the last month surveyed— it rose 1% compared to the previous month , and the cost per square meter reached $1,391,033 , while the unofficial exchange rate for the dollar was around $1,435. With that exchange rate, the construction cost settled at around US$969 per square meter .
In practice, this means that construction costs increased by about 6% in dollar terms in just one month , even though the increase in pesos was much smaller . The explanation lies in the exchange rate: when the dollar falls or remains stable while costs in pesos rise, the cost of construction measured in foreign currency tends to increase.
There's a key piece of information that often goes unnoticed: the construction cost figures compiled by the City of Buenos Aires don't include the value of the land or a series of items that, in practice, are unavoidable. Taxes, professional fees, marketing, and the developer's profit are not included, which leaves that number quite far from the actual cost of a project .
“When you add up everything that isn’t in the index, the number changes scale,” summarizes Juan Manuel Tapiola, CEO of the developer Spazios. And he details three factors that explain this gap:
- VAT and other taxes: these are crucial. In construction, they are paid at the start of the project but are only recovered years later, upon taking possession. This item can add between 20% and 30% to the total cost.
- Structure: No project operates "in a vacuum." An operational, administrative, and technical team is needed to carry it out. This cost, which the official index does not include, adds up to approximately 10%.
- Project: It's not optional. Without a project, no work is possible. However, it's not included in the official measurement. It represents an additional 10%.
With these adjustments on the table, the numbers change. According to developers consulted by LA NACION, building an "affordable" home starts at around US$1,500 per square meter (more than $2 million at the current exchange rate). At the other end of the spectrum, a higher-end property, with premium materials and finishes, can climb to US$4,000 per square meter (almost $6 million).
This indicator is closely followed by developers and investors in the real estate sector, as the value per square meter of construction is consolidated as one of the variables that directly impact the dynamics of real estate prices and the decisions of both developers and individuals who are evaluating building.
Thus, the Argentine real estate market is experiencing a scene straight out of a movie, with two simultaneous and contradictory endings. While the residential sector reached record highs in deeds in the last year, driven by the return of UVA mortgage loans, construction is lagging behind .
The situation in 2025
After years of financial drought, funding was once again channeled towards housing and had an immediate impact on demand, especially between the end of 2024 and mid-2025, when the reactivation of credit occurred "strongly", driving operations both in CABA and in the province of Buenos Aires .The data is compelling: in 2025, the mortgage-to-deed ratio exceeded 15%, doubling the average of the last five years and reaching its highest level since 2018. This is a significant shift from the almost absolute predominance of cash payments that characterized the 2019–2023 period, when credit was practically nonexistent.
In numbers, 2025 ranked as the fifth best year in 27 years. It closed almost meeting market expectations with 69,461 deeds signed in the city of Buenos Aires —70,000 were expected—: 26.8% more than 2024, which closed with 54,770 transactions, according to data from the Buenos Aires Notary Association.
Of the total number of deeds, almost 14,000 were mortgaged. That is, nearly 20% of the total were purchased with a mortgage, representing a 180% increase compared to 2014. Despite these figures, it wasn't enough to reach the boom that occurred between 2017 and 2018, when UVA loans boosted the real estate market, reaching 16,000 mortgaged deeds.
The market is selling existing stock, but the replenishment of new units is progressing at a slower pace. Ricardo Pristupluk
This change in climate was also reflected in prices. According to the BBVA Research report on the real estate and construction situation in Buenos Aires (CABA) leading up to 2026, all three segments (off-plan, new builds, and used properties) showed year-on-year increases ranging from 5% to 11% during 2025. This trend was more sustained and less dispersed than in 2024. It represents a gradual recovery, without abrupt jumps, but enough to ensure that the bottom has been reached .
“The report confirms a shift in the dynamics of residential real estate : greater macroeconomic stability and the return of mortgage lending have allowed demand to recover and the market to regain depth. Looking ahead to 2026, the challenge will be to sustain this momentum without sacrificing accessibility, in a scenario where the fundamentals of the upward cycle will appear more robust,” noted Mario Iparraguirre, senior economist at BBVA Research Argentina.
But the biggest question mark over its future lies in construction . Between the end of 2023 and the third quarter of 2025, the national GDP (Gross Domestic Product) accumulated an improvement of almost 2%, but construction was the hardest-hit sector, suffering an 11% contraction . “The sector was left out of the recovery cycle, contrary to the trend of services and primary activities,” explained the survey, which used official data from the National Institute of Statistics and Censuses (INDEC).
Are more properties being sold, but less being built?
The answer lies in a paradigm shift : we are facing a market that is liquidating existing stock , but not replenishing it at the same rate. Apartments that were already built or in advanced stages of construction are being sold, but new projects are not being launched in equivalent proportions . There are three main reasons behind this phenomenon, which are explained in the BBVA report:- The end of the "opportunity" : For years, building was significantly cheaper than buying a finished unit. This gap generated what in economics is known as Tobin's Q: when the replacement cost is lower than the market value, it's worthwhile to invest. That ratio has fallen by around 30% in the informal market. In other words, it's no longer an obvious business to invest dollars in the prefabricated building, so the window of opportunity has shrunk.
- Pressure on margins: the Construction Cost Index (CCI) has once again risen faster than the selling price per square meter. This presents developers with a difficult dilemma: each square meter costs more to produce, but the market will not tolerate unlimited price increases without negatively impacting demand.
- The void left by public works : the contraction was historic, and the private sector has yet to compensate for it. In economies like Argentina's, public construction acts as a stabilizer. Without that cushion, economic activity becomes more vulnerable to volatility.
On this last point, the document warns that the contraction of public works significantly reduced state funding for the sector, leaving private investment as the main driver . The problem is that this engine is still operating at half capacity. Building permits and material shipments remain below pre-pandemic levels, although 2025 saw a slight recovery in authorized surface area and an increase in the average scale of projects, reflecting the progress of larger-scale developments. In other words: fewer permits, but larger ones.
“The construction sector reacts with greater sensitivity and lag to the macroeconomy,” Manuel Valdes, Commercial Director of Criba, explained to LA NACION . “Even if GDP improves, investment depends on long-term expectations and predictability . Today, the priority is to plan prudently and secure contractual backing before starting new phases.”
The decline in public works left private investment as the sole driver of activityHernan Zenteno - La Nacion
For Valdes, there's an "elephant in the room" that no one wants to mention: the tax burden . "Without a profound tax reform that complements labor reforms, it will be difficult to regain momentum, especially in middle-class projects, which are the ones that suffer the most from the weight of cumulative taxes," he warns.
This lack of dynamism is reflected in a statistic from the report based on data from the National Institute of Statistics and Censuses (INDEC): asphalt is the only sector experiencing growth, while brick and concrete construction remain stagnant. The market is becoming more demanding, with only large-scale projects and solid financial structures moving forward, leaving small builders unable to absorb the costs behind.
For Damián Tabakman, president of CEDU (the Chamber of Urban Developers), the current scenario requires a much more sophisticated analysis than in the past. “ Before, those who entered the market without prior experience did well because the numbers were plentiful. That's no longer the case,” he states.
Tabakman warns that, while politics and the dollar seem to be offering a respite, the combination of high costs and stagnant prices necessitates reinvention : “The developers with the best understanding of the market will win. This doesn't just mean the premium segment; it's for those who manage to find a distinctive product, with disruptive strategies and financing options.”
Towards a recovery in 2026
According to the expert, the path to a genuine recovery by 2026 is not easy. “What needs to be done is easy to say but difficult to execute: be much more efficient in cost control, smart in importing supplies, and disruptive in marketing. Anyone who doesn't understand that the combination today is price, track record, and innovation will be left behind,” Tabakman states.According to Valdes, the sector is still in a phase of absorbing excess inventory. “A clearer recovery could begin in 2026 if stable macroeconomic conditions are consolidated and access to financing improves,” he states, although he again emphasizes the need to review the tax structure.
The fundamental question is whether this decoupling is temporary or structural. The BBVA Research report suggests that the “invisible” construction boom could begin to emerge in 2026 if two conditions are met : consolidation of mortgage lending to finance demand and a decrease in funding costs for businesses . If credit not only drives deeds but also pre-sales and launches, the cycle could be completed.
Furthermore, bank financing should play a central role . In 2025, mortgage lending recovered, but still represents only 0.5% of GDP. “The Argentine financial system has the capacity and the challenge to expand its reach, as in other economies in the region, to channel savings towards housing and support more inclusive and sustainable real estate development,” the analysis states.
The biggest challenge this year lies in the construction sector, which began with low activity, fewer projects, and tighter margins. Recovery will depend on private construction, the cost of financing, and the reactivation of public works projects.
www.buysellba.com
