Housing market situation

Buying, Selling, Building, Tax issues, anything regarding real estate or properties in Chile.
Forum rules
NO DISCUSSION OF SPECIFIC REAL ESTATE AGENTS BY NAME, LINK, OR RECOMMENDATION ANYWHERE ON THE CHILE FORUM.
User avatar
admin
Site Admin
Posts: 17468
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Housing market situation

Post by admin » Sun Feb 03, 2019 7:22 am

so one more funny story related to the apartment saga.

my brother owns an apartment directly across the street from the one we were renting, that he has owned for 25 years or so. he rents it out. i even lived there for a while when i first arrived in chile and it was their primary residence. bigger than the one we were renting. 2 bedroom, 2 bath, and a slightly newer building.

yea, neither he nor I even entertained the idea of us renting his apartment. talk about the worse landlord / renter mix from hell: family.

so he calls me up just before i left for santiago. the apartment situation comes up in the conversation. he mentions that they just raised the rent on his apartment to 680,000 a month, exactly what the new owner wanted for our apartment. i was like, "so you are the F$%ker that raised my rent".

the new apartment owner was probably surfing the rental advertising in the neighborhood and seen my brother's price across the street, and thought they could get the same out of us.

again the apartment was half the size of my brother's apartment, so the price was still ridiculously high for the area and the number of apartments avaible.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

PXYC
Rank: Chile Forum Tourist
Posts: 5
Joined: Sun Jan 27, 2019 9:09 pm

Re: Housing market situation

Post by PXYC » Sun Mar 31, 2019 9:02 pm

Hi all,

After being a silent user on this forum I am finally putting into words some ideas. Maybe there are too many ideas on a single post, but here it goes..

(1) going back some 20 or 15 years ago in Europe, a young professional with a good salary could still buy an apartment in a good location after some few years of savings and a loan. As of now that is just not possible anymore, housing has become too expensive.., you need way more than a good salary. In a way, after university access became the new normal, buying an appartment in a very nice location some 15 years ago was your last train for fast economical ascension in Europe..
I think we are living in Chile a similar scenario, in which there are still affordable opportunities for young professionals with better-than-average salaries and good credit score, but its evident that as time goes by, that margin is decreasing, and so it seems right to compare Chile with Europe and say: "IF IT'S STILL AFFORDABLE, BUY IT WHILE YOU CAN"!

(2) However, I see so many middle class Chileans buying their second house as a retirement strategy... That certainly is the major risk I see in Chile..., you have way more houses than what you need. Those 20 floor buildings in Concon may look nice now, but wait until 2040 to see what the younger generation thinks of dated badly kept enormous concrete building that totally ruined what once was a nice beach view jajaja..

So, combining (1) and (2), I believe there is still money to make in Chilean housing market, but only in good locations that will keep their appeal to younger generations for primary residence. For the limited knowledge I have of Chile, I think the comuna of Providencia in Santiago fits this description. What do you think?

Ok so this is where I think maybe this post had too many ideas, because here comes the part on which I reaaally wanted feedback from the forum:
I have a decent salary but I'm only here since 2015 so I've only saved 80 palos, which takes me nowhere in Providencia. I was targetting appartments up until 120 palos, covering the difference with a loan. Except that today I had an idea: what about "remates"?
So please share me your thoughts on everything you know about "remates":
- Is it safe and regulamented? Is there anything to be aware of on the legal side?
- What is the typical path that leads an appartment to be "rematado" here in Chile?
- Is there any web portal to search for all properties in "remate", or does each remate company manages its own properties? I guess what I am questioning is: where to look for?
- Is there any chance somewhere like Providencia has ever any offer on "remate"? Is there any statistic on the average % discount?
- Would you dear experienced forum colleague ever consider "remates" as an opportunity? Please share any experience or advice you have in this area.

User avatar
admin
Site Admin
Posts: 17468
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Housing market situation

Post by admin » Mon Apr 01, 2019 7:43 am

there is a very deep and liquid auction market here, but catching a deal involves lots of research; and in santiago you are going up against people that have deep pockets and flip properties for a living. lots of them.

court auctions will be the hardest. you need to conduct careful title searches and other legal research on each property and the related case. in short, too expensive and complicated really for most people without a serious understanding of real estate here and the laws. you can win a court auction, and still not own the property. worse, you can win the auction, and find yourself in the middle of a very expensive court battle to clear the title or get your money back.

a little easier will be auction houses like Macal.cl. you can even watch auctions online to get a feel for how it works. however, because it is easier in many ways, way too many people bidding in most cases. i have seen properties even run above market price. deals in santiago will be limited.

The "flippers", only need say a 10% margin on say 10 or 20 properties to make money.; most mortals just looking for a deal on an apartment won't have firepower to hang in there.

so in auctions, you can do preliminary investigation of say 100 properties, to find say 10 proerties to do deep investigation (costs of pulling official title docs, hiring an attorney to look at each case, etc), just to get to one property you are sure you want to bid on. after that, it is how deep are your pockets, and how badly do you want the property vs. the other guys (that are often pros).
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

at46
Rank: Chile Forum Citizen
Posts: 840
Joined: Fri Sep 20, 2013 6:13 pm
Location: Vancouver/Santiago

Re: Housing market situation

Post by at46 » Mon Apr 01, 2019 11:10 am

I was told it's 'possible' to make 20-30% on a remate, if all goes well. But there are a lot of things that may not go well, like admin just said. So if you're looking for investment, just buy a small rental apartment (or four with 20 million down and the balance on credit) near a metro station. You'd be looking at 10-15% appreciation per year plus 6-8% rental income, maybe more.

at46
Rank: Chile Forum Citizen
Posts: 840
Joined: Fri Sep 20, 2013 6:13 pm
Location: Vancouver/Santiago

Re: Housing market situation

Post by at46 » Mon Apr 01, 2019 11:28 am

Btw, I would never deal with a remate by myself directly. Only via a lawyer, which shaves off a good deal of your potential savings. As to websites like Macal, the first thing you read in people's comments is that the prices are the same as everywhere else. I guess they made it just a little bit too easy for people to work with them.

User avatar
41southchile
Rank: Chile Forum Citizen
Posts: 561
Joined: Mon Jun 12, 2017 2:39 pm
Location: Lakes Region

Re: Housing market situation

Post by 41southchile » Mon Apr 01, 2019 11:29 am

PXYC wrote:
Sun Mar 31, 2019 9:02 pm
Hi all,

After being a silent user on this forum I am finally putting into words some ideas. Maybe there are too many ideas on a single post, but here it goes..

(1) going back some 20 or 15 years ago in Europe, a young professional with a good salary could still buy an apartment in a good location after some few years of savings and a loan. As of now that is just not possible anymore, housing has become too expensive.., you need way more than a good salary. In a way, after university access became the new normal, buying an appartment in a very nice location some 15 years ago was your last train for fast economical ascension in Europe..
I think we are living in Chile a similar scenario, in which there are still affordable opportunities for young professionals with better-than-average salaries and good credit score, but its evident that as time goes by, that margin is decreasing, and so it seems right to compare Chile with Europe and say: "IF IT'S STILL AFFORDABLE, BUY IT WHILE YOU CAN"!

(2) However, I see so many middle class Chileans buying their second house as a retirement strategy... That certainly is the major risk I see in Chile..., you have way more houses than what you need. Those 20 floor buildings in Concon may look nice now, but wait until 2040 to see what the younger generation thinks of dated badly kept enormous concrete building that totally ruined what once was a nice beach view jajaja..

So, combining (1) and (2), I believe there is still money to make in Chilean housing market, but only in good locations that will keep their appeal to younger generations for primary residence. For the limited knowledge I have of Chile, I think the comuna of Providencia in Santiago fits this description. What do you think?

Ok so this is where I think maybe this post had too many ideas, because here comes the part on which I reaaally wanted feedback from the forum:
I have a decent salary but I'm only here since 2015 so I've only saved 80 palos, which takes me nowhere in Providencia. I was targetting appartments up until 120 palos, covering the difference with a loan. Except that today I had an idea: what about "remates"?
So please share me your thoughts on everything you know about "remates":
- Is it safe and regulamented? Is there anything to be aware of on the legal side?
- What is the typical path that leads an appartment to be "rematado" here in Chile?
- Is there any web portal to search for all properties in "remate", or does each remate company manages its own properties? I guess what I am questioning is: where to look for?
- Is there any chance somewhere like Providencia has ever any offer on "remate"? Is there any statistic on the average % discount?
- Would you dear experienced forum colleague ever consider "remates" as an opportunity? Please share any experience or advice you have in this area.
Only? saved 80 palos in 4 years 😮
That is actually very impressive .
If you can save like that I wouldn't be rushing out trying to buy a remate hankechief appartment.
You'll be in a good cash buying position in a couple of years, prices are not going to run away much more like they have in the past. That's just my humble opinion.
Also I'm glad I'm not the only one that thinks the same about those mostrositys on the sand dunes in concon financed by some dodgy dealing, from what I hear.
Good luck.
Comuna Loncotoro Lakes Region Chile

at46
Rank: Chile Forum Citizen
Posts: 840
Joined: Fri Sep 20, 2013 6:13 pm
Location: Vancouver/Santiago

Re: Housing market situation

Post by at46 » Mon Apr 01, 2019 12:14 pm

41southchile wrote:
Mon Apr 01, 2019 11:29 am
PXYC wrote:
Sun Mar 31, 2019 9:02 pm
Hi all,

After being a silent user on this forum I am finally putting into words some ideas. Maybe there are too many ideas on a single post, but here it goes..

(1) going back some 20 or 15 years ago in Europe, a young professional with a good salary could still buy an apartment in a good location after some few years of savings and a loan. As of now that is just not possible anymore, housing has become too expensive.., you need way more than a good salary. In a way, after university access became the new normal, buying an appartment in a very nice location some 15 years ago was your last train for fast economical ascension in Europe..
I think we are living in Chile a similar scenario, in which there are still affordable opportunities for young professionals with better-than-average salaries and good credit score, but its evident that as time goes by, that margin is decreasing, and so it seems right to compare Chile with Europe and say: "IF IT'S STILL AFFORDABLE, BUY IT WHILE YOU CAN"!

(2) However, I see so many middle class Chileans buying their second house as a retirement strategy... That certainly is the major risk I see in Chile..., you have way more houses than what you need. Those 20 floor buildings in Concon may look nice now, but wait until 2040 to see what the younger generation thinks of dated badly kept enormous concrete building that totally ruined what once was a nice beach view jajaja..

So, combining (1) and (2), I believe there is still money to make in Chilean housing market, but only in good locations that will keep their appeal to younger generations for primary residence. For the limited knowledge I have of Chile, I think the comuna of Providencia in Santiago fits this description. What do you think?

Ok so this is where I think maybe this post had too many ideas, because here comes the part on which I reaaally wanted feedback from the forum:
I have a decent salary but I'm only here since 2015 so I've only saved 80 palos, which takes me nowhere in Providencia. I was targetting appartments up until 120 palos, covering the difference with a loan. Except that today I had an idea: what about "remates"?
So please share me your thoughts on everything you know about "remates":
- Is it safe and regulamented? Is there anything to be aware of on the legal side?
- What is the typical path that leads an appartment to be "rematado" here in Chile?
- Is there any web portal to search for all properties in "remate", or does each remate company manages its own properties? I guess what I am questioning is: where to look for?
- Is there any chance somewhere like Providencia has ever any offer on "remate"? Is there any statistic on the average % discount?
- Would you dear experienced forum colleague ever consider "remates" as an opportunity? Please share any experience or advice you have in this area.
Also I'm glad I'm not the only one that thinks the same about those mostrositys on the sand dunes in concon financed by some dodgy dealing, from what I hear.
Good luck.
They're turning it into Hong Con :) One thing that pisses me off is how little infrastructure investment they've been making here. With the Aconcagua refinery here which makes half of Chilean gas and diesel you'd think they have enough tax money to make Concon into a really nice little town. They can't even make proper road connections to F-30 to get people out of here.

User avatar
admin
Site Admin
Posts: 17468
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Housing market situation

Post by admin » Mon Apr 01, 2019 1:04 pm

sorry, but concon, like pucon, is another place for the new rich of chile to pretend they "made it" by buying a postage stamp of an apartment so they can tell their friends they are going to the beach for the weekend or whatever.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

PXYC
Rank: Chile Forum Tourist
Posts: 5
Joined: Sun Jan 27, 2019 9:09 pm

Re: Housing market situation

Post by PXYC » Mon Apr 01, 2019 2:31 pm

Oh hey, really appreciate all your feedback, and "remates" is off-limits for me then!

I'm not in a rush to buy, I'm just interested, I really think that Chile will repeat the history that I already lived back in Europe, I'm just trying to learn the grey areas specific to Chile.

So far families trying to sell their parents appartments to subsidize medically assisted retirement were the only deals I tried to bid in Providencia, these kind of businesses usually comes with 30% dicount price but they obviously prefer "diñero contado" and I still need 40% of a loan so I was never able to make a deal. Also, its not easy to find so many opportunities like this - which is a good sign for the old folks I guess.. :wink:

For the other user who recommended me buying two or three appartments with credit, that is exactly what I won't do. I'm very careful with those kind of moves. Let me tell you what I know:
1. Jose buys 200k apartment at the top of the market with the confidence that market will always goes up. Jose can pay dividend but he barely makes it, in fact, his parents are his "fiador".
2. Some bank sneezes in USA. Economy drops. Pheriperical countries ate dragged into it.
3. Jose cannot pay his dividend. He tries to sell for 210k. He tries to sell for 200k. He tries to sell for 190k. The bank goes for his parents house and Jose finally is forced to sell for 150k because it is best to pay a 50k debt of nothing than the bank taking Jose's parents home.
4. After a 5 year correction, economy is better again and the housing market reaches a new top, but Jose is in deep sh*t forever.
I know people in my homecountry that lived this.

Look here another story closer to home, I have a Chilean friend, she is a doctor and she probably has a better salary than me, she bought a 300 palos appartment in 2017 in Providencia, it's very nice but i think "gee a little more and you could buy a pied a terre in Brooklyn, is it really this good here in Providencia?". In 2018 she has an amazing opportunity for a 2 year fellowship (with no salary, just a little housing help from governmenment program) abroad so she needs money and she cannot afford to pay her 1 palo dividend every month. Here what happened: she cannot sell her appartment for the same price and she is now renting it for 750 lucas a month. Ok so banks here give good credit score to doctors and she was able to refinance her debt, and she will probably return for an even better salary, but honestly i have known too many good people whose life were ruined by too much debt and never recovered. I'm good with what I have, I will not risk it, I am bidding tops 150 palos appartment.

PXYC
Rank: Chile Forum Tourist
Posts: 5
Joined: Sun Jan 27, 2019 9:09 pm

Re: Housing market situation

Post by PXYC » Mon Apr 01, 2019 2:55 pm

Also, another alarm sign I became aware of most recently is that Manquehue constructora owners are selling a part of their shares in the stock market. Well, sure, IPOs is a great way for a company owner to get more capital to invest in new projects and grow, but it also is a great way for those same company owners to become more millionaires by selling a company at the top of the market knowing they won't make the same profit margin as before - which I think its the case. History repeating, history repeating.. hopefully not, and in a way, Chile is run on an economic model much closer to USA than Europe, which goes for faster economical corrections whenever needed, and it runs on low government debt, I'm definitly not a pessimist regarding Chile.

at46
Rank: Chile Forum Citizen
Posts: 840
Joined: Fri Sep 20, 2013 6:13 pm
Location: Vancouver/Santiago

Re: Housing market situation

Post by at46 » Mon Apr 01, 2019 3:06 pm

PXYC wrote:
Mon Apr 01, 2019 2:31 pm

For the other user who recommended me buying two or three appartments with credit, that is exactly what I won't do. I'm very careful with those kind of moves. Let me tell you what I know:
1. Jose buys 200k apartment at the top of the market with the confidence that market will always goes up. Jose can pay dividend but he barely makes it, in fact, his parents are his "fiador".
2. Some bank sneezes in USA. Economy drops. Pheriperical countries ate dragged into it.
3. Jose cannot pay his dividend. He tries to sell for 210k. He tries to sell for 200k. He tries to sell for 190k. The bank goes for his parents house and Jose finally is forced to sell for 150k because it is best to pay a 50k debt of nothing than the bank taking Jose's parents home.
4. After a 5 year correction, economy is better again and the housing market reaches a new top, but Jose is in deep sh*t forever.
I know people in my homecountry that lived this.
My point is not about the amount of debt you can or should take on. It's that there's a greater chance of smaller affordable apartments to appreciate from where they're now under more economic scenarios than that 150K place you're looking for. They're easier to rent, too. You money is safer there. And with current interest rates they'll actually pay for themselves.

In general though, taking on debt works only in a hot, quickly appreciating market, so you can flip. Since we don't have a crystal ball into tomorrow, it's a gamble, no doubt about it. Given that smaller apartments give you roughly 20% p.a. with less risk, why create stress for yourself?

at46
Rank: Chile Forum Citizen
Posts: 840
Joined: Fri Sep 20, 2013 6:13 pm
Location: Vancouver/Santiago

Re: Housing market situation

Post by at46 » Mon Apr 01, 2019 3:21 pm

As to Manquehue Inmobiliaria owned by the Rabat family, a quick search reveals there are eight hijos who inherited the assets after the founder's death. They've been selling some of their goodies since 2000 probably to give each son a bit more business independence. While it's great to sell at the top of the market, that might not be the main motivation in this particular case.
http://impresa.lasegunda.com/2016/08/29/A/7P30BEVJ/all

Post Reply