Signs of recovery for the real estate sector

It is no secret that the real estate sector has been impacted by the greater uncertainty that has affected the local market in recent times. However, investment opportunities are beginning to be glimpsed leveraged by both internal and external factors that are worth looking at carefully, and that could motivate the return of capital to a sector that has traditionally been attractive due to its limited level of risk.
On the one hand, the measures taken by the Central Bank to deal with inflation, particularly the higher rates, added to the better performance of the IPSA in recent days and the increase in the price of the dollar in the last year, are making the local market recover its attractiveness in the eyes of investors, who had recently chosen to look for opportunities abroad. In parallel, the overheating of emblematic markets for chilean investors such as the state of Florida in the US, also begin to generate return incentives.
From the point of view of supply, there is a stable stock level in the face of growing demand, a situation that should be exacerbated due to the slowdown in the entry of projects in the last two years. Do not forget that the demand for the use of housing is quite inelastic, as it is a priority for families. Proof of this is the low vacancy rate of leases, close to 1%, and the increase in their price.
Although large real estate companies have an important stock of projects and land, there has been a brake on the purchase of new land and even the withdrawal of emblematic transactions, such as the former Pérez Zujovic roundabout, generating an unprecedented opportunity for real estate companies without stock to acquire land in locations that a few months ago were not available.
All these factors suggest that the local real estate sector should tend to resume a certain dynamism hand in hand with new actors with very well located projects. Now, it is important to take care of this good scenario and this will also depend on the signals that the government can give to the sector, so as not to repeat episodes such as the one that occurred in Plaza Egaña, where environmental permits were revoked to a project of 1,828 homes, generating a feeling of unnecessary uncertainty in the field, which by the way was already very hit by the pandemic and the effects of the withdrawals.
The advance of the real estate market will not only contribute to the creation of jobs and the economic development of the country, but will also help to advance in the deficit of 700 thousand homes, the highest in 25 years, which the State cannot correct on its own. If the brake on the new supply of real estate continues, it could generate a crisis of access to housing, affecting the battered middle class, with property values unattainable.
Now, on the part of the private sector, we also have challenges to meet so that this sector progresses according to the new times, echoing these better perspectives. And these lie in developing projects that contribute to building a better city and respond to the needs of its environment and communities, being proactive in the search for solutions. It’s time to start.

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Original source in Spanish