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The construction sector is facing a crisis due to rising material costs and the falling value of the dollar, which is significantly increasing the price of construction per square meter. According to a report by Reporte Inmobiliario, in November 2024, the cost of constructing a building in Argentina reached its highest nominal value in dollars since 2008. This situation is affecting developers profitability, as costs have skyrocketed while sales prices remain stagnant. By 2025, developers anticipate that cost management will be a key challenge. Iván Briones, commercial manager at Kohon, explained that during periods of high inflation in pesos, it was difficult to determine who profited from a project. However, with a clearer economic picture, small developers are struggling to figure out their numbers due to the disproportionate increase in construction materials. The political and economic shift that began in December 2023 had a direct impact on construction. Nicolás Lang, commercial manager of Lagoon Pilar, noted that price stability and the unification of exchange rates led to strong inflation in the first months of 2024. To control this trend, the government implemented the crawling peg currency adjustment mechanism, with monthly devaluations of 2%. This exchange rate adjustment, combined with accumulated inflation, raised construction costs in dollars. Damián Tabakman, president of the Chamber of Urban Developers (CEDU), stated that the current construction cost of a building is around $1,500 per square meter. Adding taxes, fees, commissions, and the value of the land, the final cost amounts to $2,200 per square meter, while the average sales price is $2,500. With minimal profitability and a real estate market with no room to pass on costs to buyers, the sector faces a challenging outlook. Expectations are focused on the stabilization of the economy and possible government measures that will revive investment in urban developments. |
