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How real estate developments are funded amid rising construction costs: strategies and payment plans - Ambito Financiero
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www.ambito.com
August 25, 2025
By Jose Luis Cieri
Housing construction prices have risen 107% in 18 months. Companies are implementing their own financing schemes to support projects and demand.
In a scenario with rising building values, developers must plan numbers and strategies well to attract buyers and investors.
Construction costs have increased by 107% so far this year, according to data from the Chamber of Urban Developers (CEDU). In this context, real estate projects are moving forward with their own financing plans, pre-sale schemes, and contributions from private investors.
The lack of traditional mortgage loans ( although Economy Minister Luis Caputo announced that Banco Nación will offer them in dollars, but nothing has happened yet ) is forcing companies to design alternatives to sustain their activity.
The businessman indicated that this model is extended to clients through direct financing programs. "In our building at Av. Juan B. Alberdi 3292, in Floresta, buyers can start with a 40% down payment and finance the remaining 60% in up to 120 fixed installments, with amounts similar to those of rent. This makes home purchase more accessible without relying on a bank mortgage and guarantees the continuity of the project," he noted.
Regarding divisible mortgages , Orlando praised their potential, although he warned that full implementation will take time. “In the meantime, we are developing our own solutions that allow buyers to take immediate possession of the home. The direct financing program simplifies the process, eliminates banking procedures, and ensures quality and delivery times,” he said.
Regarding planning, he emphasized that the key is to anticipate economic cycles. "We work with sales plans that not only seek to attract buyers but also guarantee a stable cash flow. By offering flexible plans, we are able to sustain the project and provide predictability," he stated.
Stul emphasized that the rationale is to reduce the capital required rather than maximize profit per unit. He explained: "We're not afraid to sell more cheaply at certain stages if it means lowering the required capital contribution. The business isn't about earning more, but about investing less. This rationale allows us to maintain our pace in complex situations."
A recently completed building in the Floresta neighborhood
When asked about divisible mortgages, he considered that the tool could expand the buyer base, although it won't have an immediate effect. "The challenge is to ensure genuine funding and clear rules that sustain it over time. If implemented well, it will boost demand and provide predictability for starting new projects," he noted.
Regarding prices, the company handles prices that depend on the stage of construction. Currently, one-bedroom units range from $90,000 to $140,000, while two-bedroom units range from $160,000 to $200,000.
Current projects are concentrated in neighborhoods like Villa Crespo and surrounding areas of Buenos Aires, with a good relationship between land cost and sales value, and sustained demand from a young population and small families.
The executive emphasized that each development requires a specific strategy. He stated: "In some cases, we evaluate bank financing or instruments that cover volatility, but in general, the priority is to sustain the project with our own resources and flexible sales programs."
Brian Kuperman , partner and CEO of BE Desarrollos, emphasized that the company's strategy seeks to maintain continuity over immediate profitability. "In a context of high inflation and exchange rate volatility, our priority is to remain in the market. We don't approach a project with a fixed profitability percentage, because we understand that margins are tight. The key is ensuring the project progresses and fulfilling the commitments made to clients and investors," he explained.
That logic is reflected in every operational decision. Kuperman added: “Today, high margins are unsustainable, but we believe sustainability is key. Our vision is to be prepared when better times come, with a strengthened muscle to take advantage of the opportunities that arise.”
It's important to implement hedging tools such as stockpiling materials and adjusting quotas based on the CAC index. "Stockpiling allows us to set prices with suppliers, while adjusting quotas follows the evolution of construction costs. In this scenario, profitability is no longer the central variable, and the most important thing is the continuity of the projects," explained Gómez Araujo.
A unit almost ready to be used
They are currently concentrating on projects in Núñez, Saavedra, Belgrano, Colegiales, and Caballito, as well as Parque Patricios, where they have active projects.
Current prices are US$2,100 per square meter in Parque Patricios and US$2,600 in Núñez, with studio - and two-bedroom units ranging from 40 to 80 m2.
Barrera gave another example in Monserrat: “We launched a project two blocks from Favaloro Hospital, where you can access it with a down payment of US$15,000 and installments starting at US$1.7 million. As the project progresses, the initial investment appreciates, and upon completion, there's typically a 50% increase in dollars. The client can resell at a profit or use the unit for temporary rental.”
In the latter case, the company offers a full management service that includes check-in, check-out, cleaning, and maintenance. He concluded: "It's a turnkey model that allows the buyer to generate income without having to worry about management. We manage everything and charge a 20% commission on the proceeds."
www.buysellba.com
Source:
Cómo se fondean los desarrollos inmobiliarios ante el alza de costos de la construcción: estrategias y cuotas
Los valores para edificar viviendas acumulan alza del 107% en 18 meses. Empresas aplican esquemas de financiamiento propios para sostener proyectos y demanda.
www.ambito.com
August 25, 2025
By Jose Luis Cieri
Housing construction prices have risen 107% in 18 months. Companies are implementing their own financing schemes to support projects and demand.
In a scenario with rising building values, developers must plan numbers and strategies well to attract buyers and investors.
Construction costs have increased by 107% so far this year, according to data from the Chamber of Urban Developers (CEDU). In this context, real estate projects are moving forward with their own financing plans, pre-sale schemes, and contributions from private investors.
The lack of traditional mortgage loans ( although Economy Minister Luis Caputo announced that Banco Nación will offer them in dollars, but nothing has happened yet ) is forcing companies to design alternatives to sustain their activity.
Integrated strategies and long-term plans
For Ricardo Orlando , president of Kuan SA, the key is to view each project as part of a financial chain. “Given the constant increase in construction costs, the strategy to ensure the continuity of real estate projects is a solid financing approach and integrated analysis. Instead of viewing each project in isolation, we manage a continuous production and financial chain. This allows us to optimize costs through economies of scale and redistribute resources between projects, mitigating the impact of inflation,” he explained.The businessman indicated that this model is extended to clients through direct financing programs. "In our building at Av. Juan B. Alberdi 3292, in Floresta, buyers can start with a 40% down payment and finance the remaining 60% in up to 120 fixed installments, with amounts similar to those of rent. This makes home purchase more accessible without relying on a bank mortgage and guarantees the continuity of the project," he noted.
Regarding divisible mortgages , Orlando praised their potential, although he warned that full implementation will take time. “In the meantime, we are developing our own solutions that allow buyers to take immediate possession of the home. The direct financing program simplifies the process, eliminates banking procedures, and ensures quality and delivery times,” he said.
Regarding planning, he emphasized that the key is to anticipate economic cycles. "We work with sales plans that not only seek to attract buyers but also guarantee a stable cash flow. By offering flexible plans, we are able to sustain the project and provide predictability," he stated.
Partner capital and pre-sale under construction
At PKS Desarrollos, the strategy relies on contributions from partners and investors from the start of each project. Matías Stul , founding partner, noted that the goal is to multiply projects simultaneously. He explained: “We are funded primarily with capital from partners and investors and prioritize pre-sales and sales at construction sites. This allows us to reduce our own contributions and execute more projects with the same capital. By not working with bank debt, we gain flexibility and ensure continuity even in the face of rising costs.”Stul emphasized that the rationale is to reduce the capital required rather than maximize profit per unit. He explained: "We're not afraid to sell more cheaply at certain stages if it means lowering the required capital contribution. The business isn't about earning more, but about investing less. This rationale allows us to maintain our pace in complex situations."
A recently completed building in the Floresta neighborhood
When asked about divisible mortgages, he considered that the tool could expand the buyer base, although it won't have an immediate effect. "The challenge is to ensure genuine funding and clear rules that sustain it over time. If implemented well, it will boost demand and provide predictability for starting new projects," he noted.
Regarding prices, the company handles prices that depend on the stage of construction. Currently, one-bedroom units range from $90,000 to $140,000, while two-bedroom units range from $160,000 to $200,000.
Current projects are concentrated in neighborhoods like Villa Crespo and surrounding areas of Buenos Aires, with a good relationship between land cost and sales value, and sustained demand from a young population and small families.
Pre-sale, exchange of square meters and direct financing
At BE Desarrollos, Lucas Gómez Araujo , partner and commercial director, described a diversified funding scheme. “We work with different alternatives to sustain the cash flow for a project. The exchange of square meters with those who provide the land allows us to allocate the entire pre-sale money to the development of the building. We also use pre-sales for investors seeking profitability, and in parallel, we offer plans of between 18 and 50 installments for clients who need financing,” he noted.The executive emphasized that each development requires a specific strategy. He stated: "In some cases, we evaluate bank financing or instruments that cover volatility, but in general, the priority is to sustain the project with our own resources and flexible sales programs."
Brian Kuperman , partner and CEO of BE Desarrollos, emphasized that the company's strategy seeks to maintain continuity over immediate profitability. "In a context of high inflation and exchange rate volatility, our priority is to remain in the market. We don't approach a project with a fixed profitability percentage, because we understand that margins are tight. The key is ensuring the project progresses and fulfilling the commitments made to clients and investors," he explained.
That logic is reflected in every operational decision. Kuperman added: “Today, high margins are unsustainable, but we believe sustainability is key. Our vision is to be prepared when better times come, with a strengthened muscle to take advantage of the opportunities that arise.”
It's important to implement hedging tools such as stockpiling materials and adjusting quotas based on the CAC index. "Stockpiling allows us to set prices with suppliers, while adjusting quotas follows the evolution of construction costs. In this scenario, profitability is no longer the central variable, and the most important thing is the continuity of the projects," explained Gómez Araujo.
A unit almost ready to be used
They are currently concentrating on projects in Núñez, Saavedra, Belgrano, Colegiales, and Caballito, as well as Parque Patricios, where they have active projects.
Current prices are US$2,100 per square meter in Parque Patricios and US$2,600 in Núñez, with studio - and two-bedroom units ranging from 40 to 80 m2.
Turnkey schemes
Pablo Barrera , team leader and commercial manager of Alto Grande Desarrollos and M&M Propiedades, emphasized that the credit tool has become indispensable. “Self-financing has become a fundamental resource for unblocking transactions that are unviable with traditional loans. Today, a client can purchase an apartment in Palermo with a down payment of $20,000 and installments in pesos of around $1,500,000,” he noted.Barrera gave another example in Monserrat: “We launched a project two blocks from Favaloro Hospital, where you can access it with a down payment of US$15,000 and installments starting at US$1.7 million. As the project progresses, the initial investment appreciates, and upon completion, there's typically a 50% increase in dollars. The client can resell at a profit or use the unit for temporary rental.”
In the latter case, the company offers a full management service that includes check-in, check-out, cleaning, and maintenance. He concluded: "It's a turnkey model that allows the buyer to generate income without having to worry about management. We manage everything and charge a 20% commission on the proceeds."
www.buysellba.com
