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
nwdiver
Rank: Chile Forum Citizen
Posts: 3086
Joined: Tue Mar 17, 2009 8:45 pm
Location: Vancouver, BC and Chile where ever it's Summer
Contact:

Re: Housing market situation

Post by nwdiver » Mon May 20, 2019 2:54 pm

Another sector that will drop is the 5-6 bed high end houses in Las Condes, a family member lives in one with his last daughter as the other 5 have left home.......he sees no market, his kids will never have 5 children nor will any need a 6 bed house on 4500 m of land, it will probably become a 4 lot condominium which will all be owned by family......
It's all about the wine.

User avatar
fraggle092
Rank: Chile Forum Citizen
Posts: 2023
Joined: Fri Mar 28, 2008 6:35 pm
Location: In Chile

Re: Housing market situation

Post by fraggle092 » Sat May 25, 2019 10:58 am

Angalfaria wrote:
Sat May 25, 2019 6:48 am
It is really, a big issue in the history of Chile. The rental price so high and out of reachable from the hand of ordinary people. Should it is why so that, the apartments remain empty for a month? It can also damage the economy of Chile and should be harmful to the common people.
Excuse me for asking, Angalfaria from "Duabi", but are you a Bot ?
Bienvenidos a Chaqueteo City.

Après moi, le déluge

User avatar
admin
Site Admin
Posts: 21534
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Housing market situation

Post by admin » Sat May 25, 2019 11:01 am

there will be a glut of houses at some point, with rents too high to pay, followed by a mess of defaults and auctions. the "common people" will get to upgrade in to cheaper houses, as the cost basis comes down. those higher rents in the urban centers will also push the decentralization of the country.

the real estate market is is very cyclical in chile. it happens on some level like every 10 years or so. this one I think looks worse because the distortions the last administration introduced in to the market with their tax increases. in part, you can thank the socialist for higher rents and housing prices for the poor and middle class.
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.

User avatar
admin
Site Admin
Posts: 21534
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Housing market situation

Post by admin » Mon May 27, 2019 10:18 am

here you go. 8 of 10 banks lowered their interest rates.

https://www.df.cl/noticias/mercados/ban ... 91556.html

yea, that tends to light a fire under the housing market. probably keep on doing it as long as the interest rates are low.
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.

User avatar
41southchile
Rank: Chile Forum Citizen
Posts: 1754
Joined: Mon Jun 12, 2017 2:39 pm
Location: Lakes Region

Re: Housing market situation

Post by 41southchile » Mon May 27, 2019 12:22 pm

I read there is a shortage of over 30000 houses just in Los Lagos region (I imagine that includes all houses, state subsidisded houses being the vast majority I would say). I think the comment above is also true as demographics are also changing quickly, different size properties and demand for them will change. Theres a new 5 story retirement village going up in PV now.
“Facts do not cease to exist because they are ignored.”

User avatar
admin
Site Admin
Posts: 21534
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Housing market situation

Post by admin » Mon May 27, 2019 1:30 pm

41southchile wrote:
Mon May 27, 2019 12:22 pm
I read there is a shortage of over 30000 houses just in Los Lagos region (I imagine that includes all houses, state subsidisded houses being the vast majority I would say). I think the comment above is also true as demographics are also changing quickly, different size properties and demand for them will change. Theres a new 5 story retirement village going up in PV now.
That is probably another trend to watch outside of Santiago, especially around los lagos or similar "vacation" destinations. Lot's of aging people moving out of Santiago, looking for a cheaper place to live. They have equity to outright own their homes or apartments in Santiago. Possibly a property or two they bought in the South decades ago. Many probably originated in the South, moved to Santiago through their working years, and have family or roots in communities outside of Santiago. Now with better connectivity, from Internet to low cost airlines, it becomes possible to live year around and not just vacation. Just think about how hard it was to make a living outside of Santiago say 20, 30, 40 years ago.
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.

User avatar
41southchile
Rank: Chile Forum Citizen
Posts: 1754
Joined: Mon Jun 12, 2017 2:39 pm
Location: Lakes Region

Re: Housing market situation

Post by 41southchile » Thu May 30, 2019 11:18 am

Its 12 days old this article but now the central bank says there is no bubble and the real estate market is healthy
https://www.df.cl/noticias/mercados/ban ... 0542.htmlĺ
“Facts do not cease to exist because they are ignored.”

User avatar
admin
Site Admin
Posts: 21534
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: Housing market situation

Post by admin » Fri May 31, 2019 8:56 am

To get an idea of the construction sector, look at the results of these builders:

https://www.df.cl/noticias/empresas/con ... 22258.html

most builders are way up.

besalco, 113% over 2018. on the other hand, socovesa was down 4%

my explanation for that is socovesa read the tea leaves wrong, and was focusing on houses. they are now moving to mostly building apartments.

also besalco is not a pure play housing builder. think they also do hospitals, mining, and other infrastructure projects as I recall.

that article also is pretty thin on companies in the housing sector. waiting to see what for instance PAZ announces, as they are more focused on apartments.
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.

User avatar
snobrd4life
Rank: Chile Forum Citizen
Posts: 219
Joined: Tue Aug 02, 2011 9:28 pm
Location: South Florida

Re: Housing market situation

Post by snobrd4life » Sun Jun 02, 2019 2:45 pm

There were a few posts on this thread a few weeks ago that were really intriguing regarding the existence of bubble and appreciation/depreciation. Admin posted an interesting comment regarding age:
admin wrote:
Wed May 08, 2019 10:29 am
you also need to look at how older buildings and apartments depreciate in chile. they depreciate more like cars, than residential property. crappy old ugly buildings vs. new shiny better built buildings simply dont hold the value in the market place anymore.

you pretty much draw a line at say anything 2001 and earlier is simply not worth what a newer apartment might go for. so there is some replacement going on in the market.
This one from at46 made me smile (see my story below):
at46 wrote:
Thu Apr 11, 2019 11:40 pm
Santiago is actually pretty easy. Buy anything within 5 min walk of a metro station and you're golden. The Metro people have done all the research for you.
Looking for some advice from the real estate landlords with multiple properties in Chile on the forum. Everybody's got opinions and I'd love to read them :)

Background: Back in 2012, we bought an 4 year old 2/2b apartment in Nunoa. Top floor of an 18 story building with a great eastern view of the cordillera. This was before the announcement of construction of Line 3 of the Metro. It's now only a 5 minute walk to the closest station ( :D at46). We financed it with an unsecured 20 year loan, so it's not technically tied to a mortgage. We lived there for about a year before moving and have had it rented out ever since as an investment property in the hopes that it would pay for itself and continue to appreciate in value. It's not really generating any positive income after loan, taxes and insurance, but the appreciation has been significant. Portal Inmobiliario shows similar apartments in the same building and neighborhood are going for about $130+ palos which is more than double what we paid for it back in 2012.

Besides replacing all of the floating floors and trim a few years ago (thank you insurance policy) due to a water leak that affected the entire floor of the building, we haven't had to make any other improvements. Apartment is now 11 years old with original fixtures and cabinets in the bathrooms and kitchen. Solid construction, but I'm sure things are starting show their age with nicks, especially in the kitchen.

Fast forward to today, we are on our latest (3rd) tenant who is about to complete 2 years with us and just asked if we would be interested in selling the apartment to him.

We no longer live in Chile and wouldn't ever live in that apartment ever again considering we've done our bit of procreating in the past few years. Apartment is desirable, but we have zero sentimental value for it. This would be purely an investment play. So what to do?

Considering the following:
  • we have a serious interested buyer willing to pay fair market price
  • no agents
  • we can continue making relatively low payments on an unsecured loan for another 12 years
Would you:
  • sell and buy new or newer somewhere else in Santiago or elsewhere considering we have the unsecured loan to play with?
  • Rent same apartment to new tenant without making improvements?
  • Make improvements?
  • Take the cash and invest something else?

Converting to USD to put to use in our current living situation in the US seems asinine given the CLP to USD rate above 700 right now.

Whoa, that was a long post.
ese ruido blanco es una alarma en mis oídos
Not in Chile for now, but still lurking.

User avatar
tiagoabner
Rank: Chile Forum Citizen
Posts: 996
Joined: Sat Mar 04, 2017 9:48 am

Re: Housing market situation

Post by tiagoabner » Sun Jun 02, 2019 3:03 pm

On the peso value, that's a 10.4% appreciation over 7 years. But when you consider the dollar, the apartment used to cost USD $130,000 and now it's worth roughly USD $185,000, roughly 5.2%. I'm assuming no closing costs at both ends of the operation and negligible maintenance costs. For the sake of comparison, S&P500's annualized return for the same period was 8.2%.

That said, gaming the exchange market is a fool's errand. If you have no plans to ever live in Chile again, you might as well sell it and reinvest it. There's no reason to keep such a large investment if you don't have plans to come back. And even then, you can always buy another place.
I'm NOT your lawyer, accountant or financial planner. All information at this post should be considered for your entertainment only. Consult a professional before making a decision regarding whatever topic was mentioned in this post.

at46
Rank: Chile Forum Citizen
Posts: 1174
Joined: Fri Sep 20, 2013 6:13 pm

Re: Housing market situation

Post by at46 » Sun Jun 02, 2019 4:18 pm

tiagoabner wrote:
Sun Jun 02, 2019 3:03 pm
On the peso value, that's a 10.4% appreciation over 7 years. But when you consider the dollar, the apartment used to cost USD $130,000 and now it's worth roughly USD $185,000, roughly 5.2%. I'm assuming no closing costs at both ends of the operation and negligible maintenance costs. For the sake of comparison, S&P500's annualized return for the same period was 8.2%.

That said, gaming the exchange market is a fool's errand. If you have no plans to ever live in Chile again, you might as well sell it and reinvest it. There's no reason to keep such a large investment if you don't have plans to come back. And even then, you can always buy another place.
I think you're missing the roughly 50K USD in rental income over the 7 years.

User avatar
snobrd4life
Rank: Chile Forum Citizen
Posts: 219
Joined: Tue Aug 02, 2011 9:28 pm
Location: South Florida

Re: Housing market situation

Post by snobrd4life » Sun Jun 02, 2019 4:22 pm

tiagoabner wrote:
Sun Jun 02, 2019 3:03 pm
That said, gaming the exchange market is a fool's errand. If you have no plans to ever live in Chile again, you might as well sell it and reinvest it. There's no reason to keep such a large investment if you don't have plans to come back. And even then, you can always buy another place.
I belong to a chilena :lol:

Anything is possible. It's nice knowing we have another nest in case things go completely to sh!t up North. Not that I would want to digress from the topic of this thread...
ese ruido blanco es una alarma en mis oídos
Not in Chile for now, but still lurking.

Post Reply