BuySellBA
Administrator
What are the construction cost projections for August 2025? - La Nacion Propiedades
Source:
¿Cuáles son las proyecciones de costos de construcción para agosto 2025?
Un sector que experimentó una fuerte retracción en su actividad en el 2024 debido a las altas subas, revela cómo espera que avancen los precios en los próximos meses
www.lanacion.com.ar
July 22, 2025
A sector that experienced a sharp decline in activity in 2024 due to high price increases reveals how it expects prices to advance in the coming months.
By Maria Josefina Lanzi
What are the construction cost projections for August 2025?. Gonzalo Colini
Construction in Argentina continues to swim against the tide, seeking ways to become profitable. In this context, several specialists reveal their projections for this sector for the remainder of 2025.
The issue is that, given that construction costs rose sharply in late 2023 and early 2024 , reaching a cumulative increase of 126% from October 2023 to June 2025, on the other hand, marketable square meters only increased by 23.92% during that same period. This situation complicates the income of developers, as they would have to sell for less than the construction cost.
Furthermore, used housing also grew very little relative to construction costs, only 8.68% on average, from December 2023 to June 2025. More specifically, in June, the average new square meter in Buenos Aires City was US$2,846 and US$2,932, while used housing was around US$2,211.
It's no small matter that, to date, the mortgage loans offered by banks have been mostly for the purchase of used properties . The issue is that, since a mortgage loan requires the property itself as collateral —one that can be mortgaged and is ready for deed signing—virtually all of the lines offered by banks with financing over 20 years are generally intended for the purchase of used apartments.
Today, the average new square meter in Buenos Aires is US$2,846 and the average square meter is US$2,932, while the average used square meter is around US$2,211.Gonzalo Colini
A few days ago, news broke that the government had regulated divisible mortgages , an instrument that, once adopted by banks and developers, will allow for financing the purchase of properties under construction or plots of land, something that was practically nonexistent in the Argentine real estate sector.
However, until these measures are adopted by banks, construction companies will have to continue in this situation, finding it difficult to sell new or underdeveloped construction, given that used construction still represents strong competition, or to obtain financing.
A late-May survey of industry entrepreneurs confirmed this assessment of the situation. 69% of them believed they had experienced a decrease in their activity compared to last year. These figures are from the 26th edition of the Construya Opinion Study, conducted between March 31 and April 25, 2025, with the participation of 506 professionals from the value chain across the country.
In this context, Issel Kiperszmid, founder of the Chamber of Urban Developers (CEDU), which represents 140 companies in the sector , highlights the positive momentum that the recent divisible mortgage measure could have, although he also recognizes the difficulties that will arise in implementing them. "Interest rates have virtually doubled since mortgage loans began to be issued, a reality that clearly shows that banks do not have the long-term funding for these operations ," explains Kiperszmid, adding: "That's why the government should kick-start the creation of a capital market so that banks can offload these mortgages."
69% of construction entrepreneurs said they experienced a decrease in their level of activity compared to last year. Gonzalo Colini
It's worth adding the perspective of Daniel Mintzer, director of G&D Developers , who shared his outlook on the sector at the 10th Real Estate Summit organized by LA NACION. "Credit rates are a bit high, but that's because there's little credit. There's little loanable money. There's much more demand from people who want to take out credit than from people who can contribute money to generate it . It's a matter of building trust."
Despite the restrictive context, Mintzer sees signs of improvement: “Last year, people couldn't buy with what they earned; they bought with what they already had. Instead, today they buy with what they already have and a little with what they earn (in some segments).” He added that “we still have a lot to do, but at least having some credit and slightly higher dollar values for what people earn makes us a little more accessible. We can look at the glass in two ways: either what's missing—which is always a lot—or what's already been done.”
What are the construction projections for August 2025?
In this regard, some experts share their projections for construction costs for next month. “We're seeing inflation rates falling, but even if we have low inflation in pesos in construction, if the dollar remains stable, construction costs will continue to rise, ” shares Germán Gómez Picasso, founder of Reporte Inmobiliario. At the same time, he acknowledges that the increase is slower than in 2024, but “the trend is clearly upward.”
"I see that the rise in construction costs is leveling off, which is a relief given the phenomenal growth we've experienced in recent months. I also don't think the recent slight rise in the dollar will have a significant impact, although that remains to be seen," shares Damián Tabakman, president of the Chamber of Urban Developers (CEDU).
Tabakman emphasizes that the selling price of projects under construction remains complex, "because it is still not in line with the sharp rise in dollar costs, which is leading to significantly eroded profitability ." He also discusses the potential impact of divisible mortgages on the sector, stating: " I don't think they will have an impact in the very short term, because banks don't yet have the lines available, so, for the month of August, I don't think this now-regulated DNU will bring good news."
www.buysellba.com
