October’s social outburst and the current Pandemic by Covid-19 had an impact on the entire national economy, including real estate. Despite the paralysis of most of the country’s activities, the sale of property remains active, but to a lesser extent.
This was proven by a report by YapoData, Yapo.cl’s study center, which showed that several communes recorded a drop in the average price of their properties during the first quarter. In the case of houses, the largest decrease was recorded by the commune of Quinta Normal, with a decrease of 44% compared to the same period of 2019. Providence follows, with a 39% decline.
Between January and March, the average price of this type of property in Quinta Normal reached $86 million, a substantial decline from last year, in which its average value was around $155 million. In Providence, meanwhile, the value decreased by $109 million.
«Decreases in property value are mainly explained by the Social Upburst last October. The situation caused the sectors around Plaza Baquedano to lose capital gains, as they ceased to be attractive investment poles. Added to this is the economic uncertainty that the country was experiencing in that period and which was currently exacerbated by the Coronavirus,» said Claudia Castro, Yapo.cl’s commercial manager.
In departments, meanwhile, the steepest casualties were held by the communes of Huechuraba and Vitacura, with 35% and 14%, respectively. In Huechuraba the average price this quarter was $95 million, less than the $146 million last year. It mainly responds to departments located near areas such as La Pincoya.
Vitacura also highlights its average price of $257 million. A significant drop from $302 million in 2019. From Yapo.cl explain that it is due to the postponement in the purchase decision, because of the uncertainty of the economic landscape.
When analyzing the data in greater Santiago, there is a low absorption rate in all communes. This concept refers to the sale of properties that are made in a certain period of time with respect to the number of available tenders. In this respect, the commune that led in absorption with 11%, where, out of every 10 properties on offer, just over one property managed to sell. In the vast majority of Santiago, this figure did not exceed 10%, translating into an overs offer.
The situation in April and May
The pandemic that is living in the country, and in particular the area of Santiago – quarantined for several weeks – caused lower prices in some communes, such as Huechuraba and Providencia.
The latter saw a 3.68% drop in house prices, compared to the first quarter of this year. If in the first quarter a home cost an average of $167 million, today that figure reaches $161 million, or $6 million less.
Meanwhile, In departments stands out Huechuraba, which recorded a decrease of 33% in this period. They went from $95 million to $63 million on average.
Still, in relation to demand and supply, there were slight signs of recovery. Yes from March to April, property offers fell by 40%, these recovered 24% in May. Demand for property purchases fell significantly in April, with a 63% drop compared to the first quarter. This, however, recovered 11% in May.
«It is clear that the housing market has declined since the expansion of measures to prevent the expansion of the outbreak. However, in May we already see an adaptation of the actors in this context. The need for this item to continue to work, has motivated them to look for new alternatives to generate a reactivation, being online visits through virtual reality one of the most executed. If this scenario is maintained, we plan to continue the stalemate in the Metropolitan Region, however we believe that the rest of the country will continue with this trend recorded in May,» he added Yapo.cl