What are the construction cost projections for July 2026?

Argentina's construction sector faces a critical juncture as costs surge while property values falter, severely impacting developer profitability. Specialists anticipate challenging scenarios for the sector, where understanding the cost per square meter is a crucial factor in property price dynamics.

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In a period of just four months, costs rose between 12% and 13%, while property prices remained stable or even fell in relative terms, which reduced the developer's profitability by 20%.

The current landscape is complex for real estate developers, with profitability dwindling into the red. The cost of construction in pesos has been on an upward trend since late 2023. Issel Kiperszmid, CEO of Dypsa Group and vice president of the Chamber of Urban Developers (CEDU), stated that costs rose between 12% and 13% in just four months. During the same period, property prices remained stable or even declined in relative terms, leading to a 20% reduction in developer profitability. Kiperszmid added that current costs are "above replacement values, creating a critical situation for the sector."

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Today, costs are above replacement values, which creates a critical situation for the sector.

Official figures corroborate this trend, showing seven consecutive months of rising construction costs. According to the Construction Cost Index for Greater Buenos Aires, compiled by Argentina's National Institute of Statistics and Censuses (INDEC), costs increased by 2.6% in May, reaching a cumulative 12.8% for 2026 so far. Damián Tabakman, president of CEDU, expressed the sector's difficulties at the opening of Batev 2025, noting that "the current moment is difficult, it is easy for us to list what should happen, the pending assignments. Our companies are suffering these circumstances in which costs have skyrocketed and prices have barely risen."

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The current moment is difficult, it is easy for us to list what should happen, the pending assignments. Our companies are suffering these circumstances in which costs have skyrocketed and prices have barely risen, and meanwhile, mortgage credit is weakening, credit for off-plan sales never fully materializes, and taxes do not have anything close to the degree of privilege that other sectors have.

The broader economic picture reveals a stark contrast. While the national GDP accumulated an improvement of nearly 2% between late 2023 and the third quarter of 2025, the construction sector suffered an 11% contraction. A BBVA Research report highlighted that the sector "remained on the sidelines of the recovery cycle, contrary to services and primary activities." Experts note that the cost of US$1000 to US$1200 per square meter in recent years was driven by "ridiculous" distortive values from macroeconomic imbalances. Currently, the Construction Cost Index (ICC) is rising faster than the selling price per square meter, creating an uncomfortable equation for developers: each square meter becomes more expensive to produce, but the market cannot sustain unlimited increases in the final price.

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The sector remained on the sidelines of the recovery cycle, contrary to services and primary activities.