Fausto Spotorno: “Buying square meters today is better than any investment”

Economist Fausto Spotorno made a statement that shakes the market: “Today, buying square meters is better than any other investment.” At an event held by real estate firm Predial, the specialist painted a complex picture but with light at the end of the tunnel.

“The real estate market is distorted,” Spotorno began. On one hand, prices of new and used apartments are below construction costs, a problem that hits developers and construction companies. On the other hand, an excess of 113,000 properties for sale in the City of Buenos Aires slows the recovery of values. However, his final diagnosis was optimistic: “I see no pause for the real estate market, nor for credit, nor for construction.”

The most striking data is the salary-to-square-meter ratio. According to a report from UADE, today 3.3 salaries are needed to buy a new square meter in the northern area (Belgrano, Núñez, Palermo, Recoleta), compared to six previously. “Salaries have only beaten the m², by far,” summarized Spotorno. Specifically, an average salary buys 30.2% of a new m², up from 28.6% a year ago; for used, it went from 33.5% to 39.6%.

Why this paradox? Salaries in dollars grew 9.2% year-on-year, while used prices fell 7.7%. “Internationally, prices in Argentina are cheap,” the economist stated. The origin of the oversupply dates back to 2022-2023, when currency controls encouraged construction as a way to generate future dollars using pesos. “A lot was built, and there are still many unsold properties,” warned Spotorno, who estimates the real stock could be larger than visible because many owners are waiting for a price increase.

For the supply to clear, the economist calculates one or two years of gradual increases. First, the stock of used properties must be absorbed so that demand validates the prices of off-plan projects. Conditions for demand exist, but two key elements are missing: “Financing and the willingness of savers to take their dollars out from under the mattress.”

Mortgage credit is a fundamental piece. Spotorno projects a 30% expansion by 2027, but clarifies it is growth from a low base: it would go from 0.9% to 1.3% of GDP. “The Argentine financial system grows so fast not because it is wonderful, but because it is so small that there is room to grow,” he explained. The key to reactivating credit is inflation: “To the extent that the government manages to lower inflation, there will be more interest in credit,” he noted, highlighting UVA loans as a successful instrument with low delinquency.

In construction, costs continue to pressure. In April, the cost per m² rose 3.1% monthly, reaching $1,463,247 plus VAT. With an average blue dollar at $1,373.5, building costs about US$1,065/m² plus VAT, not including land, taxes, or profitability. According to developers, the total cost is around US$1,435/m². Spotorno explained that when the dollar falls or remains stable and costs in pesos rise, the value of building in dollars increases.

Despite this, the economist was optimistic: “Cost reduction through volume. Since there is currently little volume, there is no economy of scale.” Imports could help, but have not yet had an impact. The main limitation is that activity is not running at full capacity. “The price will not collapse,” he warned, and stressed that the only solutions are time and credit. “Stability in the economy means that the entrepreneur, instead of thinking about where the dollar is, thinks about how to build more efficiently,” he concluded.

For small investors, real estate appears as an attractive option. “It is a market to invest in the long term and with some security, although returns are not high,” Spotorno closed. In a context of oversupply and high costs, his message is clear: the time to buy square meters is now.

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