How have the prices of the apartments evolved in the last year?

The data indicate that this 2017 closes with higher levels of sales and credits, as well as a moderate increase in prices.

Both Montevideo and the coastal strip present good numbers at the close of this 2017, a positive balance due to the upturn in the level of purchases and credits, which also had a more aggressive competition from banks to finance the acquisition of real estate. Finally, the rise in prices in dollars tended to moderate in the last quarter.

The real estate consultant Julio Villamide, assured "The Observer" that "clearly" 2017 will close as a year "superior" to 2016, as we mentioned at the beginning of the news, both at the level of property sales, as in the credits granted Also, prices had a stable evolution with a dollar that accompanied the economy.

"The outlook is for this (business) inertia to be maintained by 2018 as the Uruguayan economy continues to grow at the current rate," he said. In the 12 months to September, "GDP accumulated an expansion of 3.2% compared to the previous mobile year".

Villamide recalled on the other hand, that the real estate business had a "contraction cycle" that began in the second semester of 2014 and extended over a long period of time, until the first half of 2016. "There were four semesters of recession", Indian. In any case, thanks to the push of the Promoted Housing projects (formerly Social Interest Housing), the market began to recover dynamism. The consultant argues that this 2017 will close with an expansion in the amount of real estate sales, which will be between 12% – 15% versus 2016 data.

Likewise, the expert mentioned that a "take-off" of the house in the coastal strip was expected, a fact that did not materialize completely in 2017. One of the factors that affected -and is affecting his judgment- is the evolution that has showed the Consumer Confidence Index (CCI) that showed in this area a "moderate pessimism". He also adds that "this type of indicators greatly influences the expectations of the agents because the predisposition to the purchase of durable goods includes real estate."

Prices stabilized

The supply of real estate (measured in prices) in the capital tended to stabilize its rate of increase in the last quarter of the year. "Throughout 2017 the trend was to accelerate the rise in prices in dollars, but in recent months, the escalation shows signs of having been interrupted." The calculation of the Property Price Index for El Obrador (IPOI-EO) increased by 6.3% in the 12 months ending in November.

The indicator covers all the active classified ads in the main specialized portals, processing more than 25 thousand unique properties to determine with statistical criteria, the average price per square meter in dollars offered by the owners each month, thus giving "the The rate of increase in prices in recent months accelerated with respect to the beginning of the year ".

When prices are analyzed in constant pesos (eliminating the effect of inflation) the rise of the last months is diluted and the rate of interannual increase is 1.6%. "This implies that real estate prices accompanied practically in the last year, the rate of increase in the cost of living in Uruguay and not so much the evolution of the exchange rate." If one also takes into account the evolution of the purchasing power of households, 1) there was an increase in the capacity of access to own housing in the last 12 months and 2) the purchasing power of real estate of a Uruguayan average salary grew 1.4% in the last 12 months.

These data imply that in spite of the increase in dollar prices of real estate, households have greater ease of purchase, being an indicator that directly impacts the ability of Uruguayans to access a mortgage loan.

The dynamism of the credits

On the other hand, Villamide said that in the closed mobile year to September, mortgage loans grew 10.2% in Indexed Units, after having fallen sharply for more than a year.

During 2016, private banking went out to "fight the absolute leadership" held by Banco Hipotecario (BHU) in this business niche. They could do it given that they managed to reduce their interest rates thanks to funds that these institutions achieved, being an important ally the strong deceleration that inflation registered in Uruguay during the last year.

For its part, the product and segment manager MID & Mass of Banco Santander, Ana Paula Aboal, informed El Observador that as of the second half of the year, a "strong recovery" in credit growth was processed. This bank recorded a year-on-year growth of the portfolio of 11% in current pesos, with a "rise in productivities" (sale of credits) by 50% over last year. In his words: "These sales are very concentrated in the second semester. We were the first bank to leave with a rate of 5.9% in UI.

"By 2018, the growth dynamics" will be very similar "to that of this year, said Aboal.Data to be taken into account by mid-2018 Inertia brought from 2017 by several projects of Promoted Housing, will give boost to the real estate market at least until the first half of 2018, but during the second half, the offers of those properties may be scarce (again words from Villamide).

Well today there is an offer, if the current levels of presentation of new projects to the National Housing Agency are maintained -to access the tax benefits- there may be more "demand than supply", a phenomenon that could accelerate the rise of the prices of real estate.

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