Argentina's construction sector faces crisis as costs soar and property prices fall

Argentina's construction sector faces a critical juncture as costs surge while property values stagnate or decline, severely impacting developer profitability. Specialists anticipate challenging scenarios for the industry, with the cost per square meter in pesos steadily increasing since late 2023.

Issel Kiperszmid, CEO of Dypsa Group and vice president of the Chamber of Urban Developers (CEDU), highlighted the severity of the situation. He noted that in just four months, costs escalated by 12% to 13%, while property prices remained flat or fell. This disparity has led to a 20% reduction in developer profitability, with current costs exceeding replacement values.

Official data from Argentina's National Institute of Statistics and Censuses (INDEC) corroborates these concerns. The Índice de Costo de la Construcción en el Gran Buenos Aires (ICC) recorded a 2.6% increase in June, bringing the year-to-date rise to 16.7% for 2026. Damián Tabakman, president of CEDU and the Association of Housing Developers (AEV), described the current moment as difficult, with soaring costs and minimal price increases.

Adding to the sector's woes, mortgage credit is weakening, project financing remains scarce, and tax policies are perceived as less favorable compared to other industries. This economic pressure contrasts sharply with a national GDP that has seen modest growth, as the construction sector has experienced a significant contraction of 11% since late 2023, falling behind other economic branches like services and primary activities.