Apertura magazine, a benchmark in terms of business matters in our country, edited their annual special edition on Real Estate where Mariano Capellino’s opinion was central. Below, you will find his comments in two articles published in the first pages of the magazine.
Where to find opportunities in USA
While the demand in Miami is no longer validating prices, investors are focusing on cities such as Atlanta and Detroit. It appears that Miami’s past its prime. Even though the magic of marketing nowadays may place some units at US$6000/square meter in Brickell-Downtown on an off-plan basis, the demand is not validating the amount of US$4000/square meter offered for finished brand new units, as stated by specialized brokers. These amounts are so distant from the US$ 2300/square meter applicable between 2009 and 2013, after the crisis period. The good news is that there are still zones promising good results in USA, with property being sold 60 percent its value before the crisis period, such as the cities located far away from Miami Beach. Other options are Georgia, Atlanta, and even Detroit, which is experiencing some recovery after the worst cycle in its history. With the right strategy and market knowledge, it is possible to conduct class B property sales, which are the homes inhabited by most of people in the USA at values oscillating between US$600 and US$1000/square meter, with good potential for sale and revaluation before its sale, as indicated by market experts.
Impact of US dollar movement on real-estate prices
Fluctuations in exchange rate may result in loss of money for those investing in off-plan projects, as explained by an expert. Investing or not investing in off-plan projects is one of the biggest issues. The times when investors achieved 40% revaluations during the construction period are remotely behind. Today, and with the possibility of exchange rate correction, there is some risk that the value of the finished property ends up being lower than the amount invested. “This business depends on the exchange rate; therefore, you are always tied to devaluation risk. If, during the construction process, some correction takes place, you lose money”, explained Mariano Capellino, one of the founders and CEO of INMSA, company specialized in real estate asset investments management. Historically, the construction cost in the country was between US$300 and US$1000 per square meter, depending on the moment of the cycle. “The construction cost range between US$ 300 and US$ 500 is the only possible scenario to invest calmly. Within those values, the investor is protected against possible jolts in the exchange rate”, he said. Another key thing is that, in the mid-term, if the dollar increases more than the inflation rate, the prices in the Province of Buenos Aires will be more adjusted than in the capital city, as the construction cost will go down and the incidence of land in that area is lower.