Without stable prices there is no market possible

From

Ricardo Delgado

Economist. President of Analytica Consulting

Like any other economic activity, real estate and private construction in general require a word lost from the contemporary Argentine dictionary: stability. Planning, managing, deciding, ordering a logical path of investments and projects, the lack of stability makes transactions at least difficult and this is why in the current conditions the market, especially the residential one, continues to contract both in quantity and in prices.

The brick has historically been a long-term savings vehicle. A kind of public bond, of course, which has yielded even more than the bonds of stable economies. Their income, the rent, guaranteed the maintenance of the units and allowed a certain reasonable profitability. Today those conditions no longer exist in most cases.

Furthermore, it is in this activity that the serious difficulties of the policy to improve the quality of life are most appreciated. government and opposition They have failed in recent years to agree and enact a new rental law, to replace the current useless regulation, and today the market defines its rules, in an absolutely rational, defensive way, but with behaviors that reduce the real estate offer and make a large part of the transactions dollar. If it doesn’t find solutions to a sectoral issue like this, will the political leadership be able to solve structural issues, such as inflation or poverty?

High inflation too severely penalizes family income. For the fifth consecutive year, wages have lost against the increase in prices, and the possibility of having a surplus of pesos that would allow you to pay a hypothetical mortgage payment that opens up access to home ownership is nil. With expected inflation of 140%, it is unthinkable to recreate a thriving mortgage market. All incentives, on the contrary, are entered consume before saving.

The original sin of management these last fifteen years has been underestimating the harmful effects of inflation on the social and productive fabric. Without the ability to save, families lose hope of accessing their own homes. Investment decisions, in turn, are biased towards high-end projects, designed for the excess weight of high-income companies and individuals, further opening the gap between landlords and tenants.

There will be no housing policy, aimed at improving access conditions, without macroeconomic stability. High inflation punishes everyone, discourages operations and unnecessarily slows down the commercial development of these activities. Downloading it will not be simple or immediate. However, an adequate law for rents and extensive laundering of undeclared funds for medium-sized sectors could be adequate tools revitalize these sectors.