After several years of growth and increase in the investments on construction, the city of Buenos Aires has finally reached its limit. Even though during the first months of the year the construction business was still on the rise, in March there was a little decline. There are many reasons why this situation has happened, but the main reason has to do with economy itself, which indicates that everything that goes up has to go down at some time.
During the last few years, there has been a construction boom in the city of Buenos Aires. Many constructing businesses and people have invested in construction, and this clearly couldn’t last forever.
A main point that might have help in the 5% drop in construction in the City of Buenos Aires is the uncertainty that the country is going through economically speaking. This has generates investment to be on standby; opposite to what is had been happening before. Another reason for this drop could have been caused by the restrictions on buying dollars. Argentina has always compared its currency to the dollar and even the real estate’s transactions have generally been done in dollars as well. Currently, this system is changing, but in the mean time, many prices are still fixed in dollars.
Likewise, we cannot fail to mention that the most important neighborhoods of Buenos Aires are filled with new buildings and constructions, and neither the infrastructure nor the physical space can handle much more constructions.
According to an real estate agent “during the last construction boom that the argentine market went through something new has happened, it wasn’t built on credit, but with the exceeding money from people savings.” So here, we can find another reason: there is no more surplus. With the economical uncertainty in the world, these days no one wants to ask for a long-term loan either, so there is no money to invest with.
So, the causes of the 5% drop in the construction business in the City of Buenos Aires are plenty, and each person or business must have their reasons. Little by little, there will appear a new area to invest in and the economy will spread their investment on other areas.
