Chile Forum

I'm trying to figure out which general direction Chilean realty prices are going. Most other places I have first hand familiarity with show either a downward trend (like Calgary) or it is a bubble about to explode (Moscow). I bought a little bit of land in Chile just months ago, and would be very interested to know where it's value is going to. I couldn't find any analytical stuff about it on the net. Would anyone have good links/personal observations to share? Thanks.

yea, what you get in terms of "expert" analysis will be fairly useless in Chile. You need to do a property by property appraisal to really get anything useful info about your particular situation. You might be able to get some real estate trends for the major cities and towns, but in rural areas you are going to need to spend a lot more time investigating. One of the odd things about Chile is that the real estate market overall is so unsophisticated that there is a sort of cultural resilience built in to the prices. People simply will not acknowledge there property is not worth that much, and many times do not recognize that their property is worth more than what they are selling it for. They know nothing of Global and national trends, and just do not care about them if they did.

Now, all that said, overall we have more or less seen prices go flat across Chile this year. Perhaps some slight rises in prices in popular areas, but nothing in the sense of the U.S. implosion of prices. The Chilean real estate markets in the central region have gone through a boom with major building in Santiago and such. There is still a shortage of office space in Santiago. We will see how the economic downturn plays in to this over the next 6 months or so. Lots of money moved in to Chile for safe haven investing and development.

Agricultural properties have been very hot because of the increase in commodity prices around the World. The South has been fairly flat, in part I believe because of the way the peso dollar moved last year in terms of both foreigners being interested, hot markets in the central region, and some of the exporters getting pounded by the 450 or so exchange rate. That seems to have suddenly been changing now that we are around 600 pesos to the dollar. I suspect it will take a year or so for that news to trickle in to the prices, if it ever does in the more rural areas. People live in a peso economy here. Again, the local culture and national perception of place means more than economics often in real estate prices in Chile.

Thank you for the reply. I just heard that where I bought my parcela for 7.5 mln they are selling lots at 10 mln now. Of course I was surprised. From the other hand, there is a big difference between "on sale for 10 mln" and "sold for 10 mln"...

yea, there is normally a terrible disconnect between what people list properties for, what people offer for the property, and what properties are really moving at. People will put absurd prices on their property, and then scratch their head for why no one even looks at the property over the course of years. You want to move a property, lower the price about 10 to 20% under what everyone else is listing their properties. We try to explain this to Chileans that are in a hurry to sell, and they just don't get it. After a year or two they inevitably come back with a bit more reality check and lower their price after not getting a single buyer to look at it.

admin wrote:yea, there is normally a terrible disconnect between what people list properties for, what people offer for the property, and what properties are really moving at. People will put absurd prices on their property, and then scratch their head for why no one even looks at the property over the course of years. You want to move a property, lower the price about 10 to 20% under what everyone else is listing their properties. We try to explain this to Chileans that are in a hurry to sell, and they just don't get it. After a year or two they inevitably come back with a bit more reality check and lower their price after not getting a single buyer to look at it.

Deja Vu! This made me laugh, just substitute Puerto Rican for Chileans in the above statement and It could be me writing about my market. Is this another case of "where ever Spanish is spoken.........."?

This is my first post here and all the info on real estate in Chile is immensely interesting because my husband and I bought land just outside of Algarrobo, 10 months ago. One of the problems seems to be, as someone stated before, expectations versus reality in the Chilean mind. The land owner we bought from has a number of parcelas for sale and it is a beautiful place, quite easily found and yet he has done virtually no advertising of the land or what is available. We found it because we went into a restaurant in Algarrobo and asked the waiter if he knew of anything for sale. He then went and asked the owner, who in turn asked a friend and then the waiter came back and gave us directions!!

Chileans really don't seem to understand how a real estate market could be working for them and they really don't want to listen when you politely try to tell them. Recently the land owner talked with my father in law, complaining they they had not sold any of the parcelas in months and he was at a loss to explain it except in terms of the world wide slump in real estate. And of course, my father in law commiserated with him about the terrible economy.......... I don't think that's the reason; nobody talked about possibly lowering prices or that he won't get up off his behind and do some work for it. He really does expect everything to just come to him if he sits and waits in his house overlooking all the beautiful land he has to sell. The few people who have bought are all American, French and I am English/Canadian......my husband is Chilean but has lived in Canada since he was 28, so about 19 years. The majority of Chileans, in my humble opinion, just do not see themselves as part of the rest of the world. They don't feel it has anything to do with them so why would they change the way they do things!

yea, - you talk to someone in Chile, and he says the price I paid is dirt cheap, you talk to another person, and he says I could find a way better deal for the same money or push the price way down. What drives me crazy sometimes is that both are right

Here is an article I wrote trying to explain some of it:

http://www.allsouthernchile.com/southam ... chile.html

I read an article in El Mercurio a few months ago about the growing apartment oversupply in Santiago. Inventory has been building up much more than demand over several years, so you end up with thousands of unsold apartments, yet new construction still gets started. At some point reality should hit, I think in Santiago or Viña at least prices are no longer going up, but I can see how they're going to go down now that credit is more expensive (higher rates *and* more expensive UF).

Some contacts of contacts we have with experts in the residential real estate markets in Santiago are expecting about a 10 to 20% decline in prices in Santiago to set in the next 12 months.

Not unless they can "convert" those new Santiago apartments towers and new suburban track hell homes into precious commercial office space.

I hope we can expect lower rent in Viña!

I disagree strongly, do not ever put your property on the market UNLESS you mean to sell. Testing the market in that way is a giant time waster for a potential buyer and unless you actually sell and close the deal, offers mean nothing.

admin wrote:Now, all that said, overall we have more or less seen prices go flat across Chile this year.

Do you mean in UF or pesos, out of interest (since there's a big difference over this year)?

I have to agree about the totally unrealistic prices some people ask compared with similar properties... I wondered if they're just expecting you to bid them down. One advantage of new build is that you know where you are with the price.

James.

First mistake of buying real estate in Chile is assuming the seller and real estate agent are rational or somehow acting in their own best interest. They will often shoot themselves in the foot in the most creative ways, especially when dealing with a foreigner.

Private sellers will generally express their price in pesos. Companies will express their prices in UF. Not always, but most of the time. I don't see people doing silly leaps this year however over say last year. We don't go in to areas and for example new properties being listed are like 30% or more over properties listed the year before, even if those properties never sold at the old price. For the most part, even people with inflated ideas of what their property is worth seem to be listing at last years prices. These are real generalizations however.