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In a context of rising costs and the recent elimination of the exchange rate restriction, building affordable housing in Argentina now requires a significant investment. According to data compiled by industry experts, the construction cost for a basic-quality home starts at around US$1,500 per square meter, although it can drop to US$1,000 for lower-quality construction or climb to US$3,000 with high-end materials. With these reference values, building a high-quality 70-square-meter home represents an investment of approximately US$105,000, while an 80-square-meter home costs around US$120,000. In contrast, opting for more affordable materials would allow a basic 70-square-meter home to be built for US$70,000, and an 80-square-meter home for around US$80,000. The increase in construction costs, which has accumulated 108% since October 2023, is due to a combination of factors. The recent stability of the dollar has led to the need for more dollars to finance construction projects, in a context where costs have historically followed inflation in pesos and fluctuations in the US currency. Currently, lower exchange rate volatility directly impacts the rise in prices of inputs and services related to the sector. The devaluation of the official exchange rate also raised the prices of key imported inputs such as steel and paint, which until now had been imported at lower prices. Although the exchange rate has eased slightly in recent days, experts anticipate that the construction sector will continue to face challenges in stabilizing costs and energizing new projects. With the dollar stabilized within a range and domestic costs continuing to hold steady, the outlook for real estate developments and private projects remains complex. According to analysts, a stronger macroeconomic balance will be necessary to return construction costs to more affordable levels and revive demand for new homes. |
