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Argentine developers persist despite soaring costs, citing 'reordering' and future optimism
🇦🇷 Argentina /Economy & Trade

Argentine developers persist despite soaring costs, citing 'reordering' and future optimism

From La Nación · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Argentine developers are continuing to invest in land despite a significant increase in construction costs under the Milei administration, with dollar-denominated costs rising 138%.
  • Industry leaders acknowledge shrinking profit margins and a challenging market, particularly in less premium areas, forcing a focus on high-end projects.
  • Despite the difficulties, some developers express optimism, viewing the current situation as a necessary "reordering" after years of economic distortion, and anticipate a future upturn.

Argentine real estate developers are pushing forward with land acquisitions and projects, even as the cost of construction in dollar terms has surged by 138% since President Javier Milei took office. This resilience comes amid a complex economic climate, marked by rising costs and market challenges.

It is a moment of reconversion, we all have our margins compressing, which makes us work more and earn less. So, those who are used to working less and earning more are in trouble.

— Carlos SpinaSpina explains the current financial pressures faced by real estate developers in Argentina.

Industry figures like Carlos Spina of Argencons acknowledge the current "reconversion" phase, where profit margins are compressed, demanding more work for less gain. He notes that certain areas, especially those not considered premium or reliant on credit that is currently inaccessible, are facing significant difficulties. "There is a cost structure that has risen, and we are all in the same boat," Spina stated, adding that margins have become negative in less desirable locations.

Developers are serial optimists. I like this current situation, we cannot evaluate what is happening without first trying to see where we came from. We came from an absolutely distorted Argentina in every sense. I believe it is a reordering and a turbulence that is in its final minutes, and very good times are coming.

— Gerardo AzcuyAzcuy expresses an optimistic view of the current economic climate for developers.

However, not all developers share a pessimistic outlook. Gerardo Azcuy, founder and CEO of Azcuy, describes developers as "serial optimists." He views the current turbulence as a necessary "reordering" after a period of economic distortion in Argentina. "I believe this is a reordering and a turbulence that is in its final minutes, and very good times are coming," Azcuy said. He also pointed out that while margins have tightened, the land they are currently developing was acquired under previous administrations at different price points, ensuring profitability.

We also bought the land we are developing now under other administrations and at other values. So we always have the margin.

— Gerardo AzcuyAzcuy explains how past land acquisitions contribute to current profitability despite rising costs.

Azcuy further noted a global trend toward more efficient companies, urging developers to refine their processes and create compelling products for buyers. He also highlighted a positive shift in the real estate market, with the value per square meter seeing a roughly 20% increase in dollar terms since 2023, a trend he expects to continue. Gonzalo de la Serna of Consultatio described the current period as a "transition with pain" during a stabilization process.

It is a moment of transition with 'pains' in a stabilization process.

— Gonzalo de la SernaDe la Serna describes the current economic phase for the real estate sector.
DistantNews Editorial

Originally published by La Nación in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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