It was October 2011 when, with the aim of preventing a leakage of dollars and a devaluation, the then president Cristina Fernández de Kirchner arranged, through the Central Bank, the Exchange Operations Consultation Program through which the AFIP authorized -or not – the purchase of currencies at the official price. Over time, controls intensified, making it difficult to acquire dollars for treasury. Thus, at that time, developers and marketers agree, the brick benefited,
allowing the channeling of excess pesos in assets that are traditionally sold in dollars.
Carlos Spina, director of Argencons, the creative developer of the Quartier brand remembers what happened to the trusts at cost that were adjusted by CAC. “There was a time when the dollar was at $ 4.25 and the CAC at 1000 basis points. At that time we started a work and when we finished it, the dollar had almost quadrupled and the index had only doubled to 2000. In times of stocks the brick is a way to access the future dollar with appreciation if the project is good and well managed, “says the executive and recalls that at that time the customers won because the quota was cheaper than they thought because they had to change less dollars to pay it and they ended up paying US $ 2300 / m2 when it was planned to cost them US $ 3000 “.
With this photo of the past, a question flies over the sector: will the experience of the old restrictions be revived?
Fernando Romay, partner and CFO of Romay Desarrollos Inmobiliarios, a firm that is currently developing the Thays Parque Leloir commercial project in the West, believes that, today as yesterday, the impossibility of acquiring or saving in dollars leads the market to
invest in dollarized goods such as real estate, which is also a haven of value in economic scenarios like the current one. As he explains, there is already some glimpse in this regard: “In our project, we noticed in the consultations of potential buyers an improvement in the expectations of economic agents for this 2020. The real estate market and the construction industry are going through their worst years since 2001. I think we have hit bottom, but, with the realization of adequate economic measures, the confidence necessary to initiate a reversal of the sector's cycle of decline can be regenerated, “he says.
Along the same lines, Federico Rosbaco, managing partner of the developer with more than three decades of experience adds that “many people are going to invest in bricks, punctually in a well project, seeking to dollarize their savings so much – than today they may be in some instrument in pesos-or, in the case of businesses or SMEs, their surplus in pesos.You may have to wait until the domestic market is finally reactivated for the latter to happen, but we are already having many queries in relation to financing possibilities in pesos and adjustment methodology “. Specifically, he notes, from December 2019 to the first half of January, the consultations for the developer's projects tripled. “Today the market is already more oriented in terms of economic policies posed by the new government and that makes it turn to the” brick “that historically never disappointed in Argentina,” he emphasizes.
In this same sense, Lorenzo Raggio, general manager of Interwin, argues that the restrictions on the purchase of dollars for savings purposes leave some individuals and companies with surpluses in pesos, “which they cannot accumulate given the incessant inflation. In this way “he continues,” the capitals that became dollars as a way to defend themselves against the depreciation of the peso are now forced to look for other destinations. During the previous government, “he analyzes,” they were able to buy financial instruments, but that channel no longer exists.
The brick is, in short, a way to buy dollars in the medium term; With pesos, a good is paid that, when finished, will have a denomination in hard currency.
In the comparison with the stocks of the past, Juan Ignacio Mel, commercial director of Mel Propiedades affirms that it is similar, although it has its own characteristics: “it is more restrictive in relation to the amounts – before there were the authorizations to purchase currencies according to the capacity of buyer savings – and now it's a fixed amount that doesn't change. ” According to the broker, the new version impacts in two ways: on the one hand, the process that involves the sale of used or brand-new units finished, with 100 percent cash payments, becomes slower. “In other words, the saver has to pay with his dollars or get those dollars, which in the market cost 30 percent more,” says Mel.
On the other hand it generates a greater movement in the developments under construction, where savings or excess pesos are channeled, because they do not want to resort to savings in blue, which constitutes a totally random market, or do not want to have dollars in their home . “In addition, many of the construction costs such as aluminum, iron, glass, concrete and others, are quoted in the official dollar, so when you acquire a unit under construction you are acquiring many of those costs from the official dollar. On the other hand, if I had to pay that same department and collect those dollars, in the end, I would have to pay an additional 30 percent, “he says.
The experience left by the UVA
For the time being, the last few years showed the experience of the UVA mortgage loan, which, Raggio said, left “a good apprenticeship”. According to the marketer, in general, those who took out a loan with this modality “are more than happy, even though there is a group of debtors who are dissatisfied. We have no doubt that they would be paying rent much more than what they are paying by quota. The other apprenticeship – emphasizes the manager of Interwin – is that, in a normal country scenario, it is a system that boosts the real estate market and that opens the opportunity of the own house to millions of people ” . “Errors and lessons of the UVA?” Romay raises and clarifies: “Among the first, the polynomial formula: it was planned for a macroeconomic stability scenario that was not achieved, especially in the variables of middle class income, fiscal deficit , exchange rate and increased costs for inflation. Among the latter, it was a step in the right direction, with a successful background in countries like Chile. “
Beyond the analysis, the truth is that, according to sources, there is still a sector of society that has weights to channel properties. According to Mel, it belongs to stratum ABC1. “They are the highest classes and sometimes, medium high,” he said, noting that it is they who can have a considerable saving capacity to be able to allocate that amount to construction, paying a fee from an apartment. According to his calculations, it is a public that has monthly income between $ 150,000 and $ 200,000. And from there up. In Interwin they formulate the following equation: “Any studio to pay in 24 months requires a saving capacity of US $ 1000 or US $ 1200, with a little more extended financing, would imply a saving capacity of US $ 500. To earn US $ 500, you have to have $ 30,000 and to have that figure you have to earn at least $ 120,000 clean, in hand and a gross salary of $ 180,000, “they quantify. One issue to keep in mind is that it is always required to enter with an advance that varies between 20 and 30 percent depending on the needs of the developer.
Rosbaco speaks of a “varied” buyer profile, which can range from people and families of medium-high and high socioeconomic status – “investors who do not depend on mortgage credit because they have a large part of the savings available to make their investment” – up to middle class people who for some reason or have a savings in dollars through which they can pay an advance and then take advantage of the financing in installments expressed in pesos to complete the payment. As expected, “according to what they announce from the government, there will be availability of pesos in the market and a boost to local consumption and industry with the idea of reviving the economy, so, by mid-year, the rebound will be more notorious. “
Although in and outside the sector they agree on the need for mortgage credit to take off the activity, the developers believe that the financial creativity they can offer per se will be a differential. “In this context of lack of credit, sales slowdown, increased tax pressure and cost increases in dollars and pesos, developers who are not in the day-to-day financial engineering of their projects can hardly conclude them in time and shape, in the current scenario, “Romay evaluates.
The general manager of Interwin recognizes that, here and now, there are few alternatives in terms of financing. “Some developers are granting fixed quotas in short-term dollars and other quotas in pesos that are updated by the index of the Argentine Chamber of Construction. It must be taken into account that the cost of construction increased by 1.1 percent in December of last year according to the CAC index and closed 2019 with a cumulative increase of 54.8 percent. “From the real estate agencies specialized in commercialization of enterprises, we have been doing several years of financing with developers to implement during this year” , synthesize.
What can those who have dollars do?
Damián Tabakman, president of the Chamber of Urban Developers (CEDU) puts another issue on the table: the cases of those who have saved between US $ 100,000 and US $ 2,000 cash and evaluate the possibility of generating some real return. The referent admits that he would discard a financial investment in the country because he considered it “risky”. Also those from abroad: “they are only for specialists”, he clarifies. Now, focusing on the bricks, while acknowledging that investing in an apartment in Miami would be a good idea, “there is no business for less than US $ 500,000.” “It makes no economic sense because of the costs of delegating all search and administration management to a third party that manages the asset from a distance,” he deepens.
Another destination could be to buy a property in Uruguay. In this case, Tabakman highlights the opportunity to achieve a dollar income in a country with pro-market policies but wonders “what would happen if the Argentine devaluation and the one that could come in Brazil, drag Uruguay.
Regarding the possibility of betting those dollars on the Argentine brick, he recognizes that the market is going through a moment of uncertainty with rental income on the floor but highlights the advantage of knowing how the market moves: “you know who to ask for references.” Another point in favor could be the lowering of the construction cost in dollars. “This point will have a visible impact on the prices of the projects in the well in the coming months. And that will accommodate the income to levels of logical annual yields,” he adds. For example, the construction cost of a country-type house registered the lowest value in 51 months in December – since October 2015 measured in blue dollars. About US $ 168,000 less than April 2018. In this way, Tabakman synthesizes that “it will be a year to take advantage even with the rental law in debate and with the negotiation of the debt we will see.” .
. (tagsToTranslate) Properties: The keys when investing pesos in a well to dollarize savings – LA NACION
Publicado en el diario La Nación