30 November 2017 Share

For real estate consultant Julio Villamide, this 2017 will end up being the best year for the real estate market, compared to the last 3 years of analysis.

According to the portal Constructor who was in contact with real estate expert Julio Villamide, this year will close better than 2016 and also, with better numbers than previous years.

The interview also went through other important issues such as incentives for works, approved by the Executive Power and exceeding 15 million dollars; the incentives proposed by the Intendancy of Maldonado, and in addition, a matter of great relevance as the current situation of social interest housing.

With a little emphasis on the latter, the so-called "Promoted Homes" have been the focus of critical situations, for example, the changes introduced by the Ministry of Housing that were categorized by Villamide as a "knockout" of Law 18.795. The implementation of the ceiling of 25% halved the construction of houses.

We will see below a summary of the answers given to Del Constructor

What behavior did the real estate market have in this 2017?

According to the expert, this 2017 will close better than in 2016, since last year had a first semester that can be included "among the four very negative", almost recessive, who lived the market between the second half of 2014 and the first semester of 2016. He also mentions that those two years "were really very bad, with some indicators that even were, in terms of registered sale, almost at the level of 2002". However, from the second semester of 2016, things started to go better in coherence with an economic recovery that the country presented. And in addition, in 2017 this trend is consolidating so it will be a year that will exceed the improvements obtained in that 2016.
Improvement in the economy

Is this reapunte referral was due only to the improvement of the economy of the country or also influenced by external factors?

According to Villamide, the economic improvement is basically based on variables in our country. He also adds that "it is not a coincidence that those four negative semesters we talked about coincided with Uruguay's virtual economic stagnation, with a sharp slowdown in its economic growth, although it did not go into recession, it maintained very high growth rates. low". As we saw in previous paragraphs, from the second semester of 2016 it is that the situation improves and the growth rates are already closer to 3%, that is to say, it is possible to perceive a reactivation, which is associated to phenomena also linked to the economic line , such as employment, the income of households that improved a lot due to the drop in inflation, and fundamentally "to the improvement in consumer expectations, this is a factor that we can not neglect when making a balance" .

Detailing a bit more the Consumers' Expectation, we have that this index is based on the confidence of the same, a survey prepared by Equipos Consultores and the Sura Chair of Economic Confidence of the Catholic University. "In those frankly bad semesters, we were in an area of ​​moderate pessimism and now we have moved to a zone of moderate optimism, 2017 was the best year, since 2014, 2015 and 2016 were regular years for the sector."

How did it impact, if it had an impact, the money laundering law promoted by the current Argentine government in the Uruguayan property market?

In this case, Villamide assures that it had almost no impact "from the point of view of activity levels". The impact was seen in the appraisals made by the real estate agents, since "many Argentines bleached properties they had in Uruguay, then they needed two appraisals of Uruguayan real estate agents." Thousands and thousands of appraisals were made in both Montevideo and Maldonado to regulate that But from the operational point of view, from the capital point of view, that they have been selling properties in Uruguay to buy in Buenos Aires or vice versa, taken capitals from Argentina to buy here, it did not happen. "

In a previous interview, you told me that many Argentines, retired for example, bought a property in Uruguay, no longer as a second residence, but to stay. Is this still happening?

For Villamide, this is a phenomenon that continues to be maintained in Montevideo, Maldonado and Colonia. "That constant presence of Argentines who are getting settled in Uruguay, which sometimes has fiscal reasons, but in other cases reasons of real residence, is still occurring, in fact, Argentines are still among the most active at the time of the immigration procedures to obtain residence in Uruguay, and a part of them are permanent residents in those three departments that we name ".
Promoted Homes

 In what situation is it in the topic of Promoted Housing, previously called Social Interest Housing?

In this question, the adviser indicates that they were working during much of 2016, at the request of the Ministry of Economy and the Ministry of Housing, to improve conditions and achieve a recovery in construction, specifically in investments and in hand working.

These two subjects were specifically objectives of the Ministry of Economy. We worked together and the private companies presented a series of proposals to unlock situations. After the time, says that they found the unpleasant surprise that had not been accepted "none of the proposals we had made the private." The only one approved was the change of name for Promoted Housing, given that "Housing of Social Interest" was a misleading name that led to confusion, "even to many journalists."

The other proposals were not only not accepted, but also "other points were introduced, other elements, negative, which complicated the situation a lot".

He also adds that: "We had, at the time when all this came out and it was with all the tail wind, one thousand, one thousand five hundred homes per year that came to appear." That later grew, they reached two thousand, three thousand homes per year, with an environment of two hundred, two hundred and fifty homes per month, and since 2014, when the 25% ceilings were introduced, they started to fall, and since March of this year until the beginning of October, we have descended to forty homes per month. There is a rent ceiling, among other changes, all negative, which were introduced by the Ministry of Housing, which is why, as we had previously warned you, the consequence of all this is that only there will be more investments and more jobs, but what is being done is less investment ".

In your opinion, what are these negative changes?

Here Villamide assures that it is a strictly ideological subject. It considers that there are sectors within the governing party that get along very well with the market, with supply and demand and with the actions to be carried out so that more investments arrive, on the other hand, there are sectors that get very bad with the investment private, with profit, with market values ​​and with supply and demand.

"Then I think that this line of thought was more hostile towards investment, thinking in good faith that with those changes they were going to effectively lower rents and lower housing prices, and this did not happen, it will not happen, and What is going to happen is exactly the opposite, it is simple, if one causes changes that diminish the offer, either of homes for sale or bought by investors, that are placed in rent, the result is that they have less rental offers, the demand It is still very high and therefore, prices, far from falling, will rise again ".

Proposals on Promoted Homes

In those meetings that you held with the Economy and MVOTMA authorities, what did you propose to reverse this situation?

The idea is to unlock some administrative issues that had been introduced by the National Housing Agency (ANV) "unilaterally", as for example that the Municipality of Montevideo does not accept buildings with three floors that have an elevator. But for the National Housing Agency, if they have an elevator, they are promoted homes. That is a counter-sense. The same goes for garages. The Municipality of Montevideo requires that there be half of places for garage units. If the building has forty houses, it must have at least twenty garages. If you have 18 or 19 garages, they do not approve the construction permit. "

On the other hand, it occurred to the ANV that those twenty garages, "it was good that it was the minimum but also the maximum." I return to the example, a building of forty apartments could have only twenty garages, neither nineteen nor twenty-one. the planners, especially building buildings on medians, which is already complicated in itself, because making a subsoil is costly and if the sale prices of the garages are not achieved, an additional difficulty is added. There are more garages and it does not require more to not put the promoters in financial compromise Now, if they want to build more than twenty garages they can do it But, following this example, the National Housing Agency, on the other hand, says "No, the maximum is 20." This is a contradiction and creates difficulties, and there were several things of that type. We also asked that the ceilings within the country be eliminated. s, something that was not achieved. We wanted to return to the original project, are the limits to 25%, and neither was achieved. When they put the ceilings, the production of the houses fell by half "
You, as one of the promoters of the Housing of Social Interest, what is your feeling with this, let's call it a disagreement with the authorities?

"We have the expectation that once these issues of Accountability and UPM have been liquidated, basically, they have led the economic team to put all the batteries there, and seen the real results, what we, the private ones, said. It is very likely that the Ministry of Economy could ask the Ministry of Housing to rethink the issue, that is our hope, that we did not have it in recent months because we saw the Ministry of Economy very focused on the issues I named him: beyond the hope we have today, we experience this situation with frustration.

Because something that seemed so obvious to us was happening, and, above all, because we, particularly the first months of last year, advised the government of Macri because they were interested in using the Uruguayan model, in the Uruguayan experience of the Social Interest Housing Law, to try to encourage the construction of middle class housing in Argentina. They have an institutionality of a lower quality than ours, because they do not have a Ministry of Housing or a National Housing Agency, they were interested in our initiative. And here, we fill it with obstacles and difficulties. It hurts us to see that we pass the recipe and they do it well, and we are involucionando of what works very well at the beginning. I think the changes that were introduced in March 2017 through the MVOTMA is a death blow, a kind of knockout for the law. "
Incentives and investments

And what do you think of the incentive adopted by the government for works whose investment exceeds 15 million dollars? And how could it impact the Uruguayan market?

He mentions that they are works of singular character, and they mostly refer to works in Punta del Este.

Adding this incentive of the Executive Power and those that the Maldonado Intendency overturned for projects that are presented this year, the works will begin before the end of 2017. This could lead to a reactivation of the Punta del Este market, although very slowly because there is no demand. What has been observed is that the promoters - in front of such important benefits - presented construction permits, which had no costs for them, because that was one of the benefits that the Intendancy of Maldonado gave, "in addition to additional floors of height, they are responding. " The works began with closed land and earth movement which allows them to comply with the regulations granted. The consultant expects that the largest reactivation of the sector will begin in 2018. How is Uruguay in terms of investment in construction compared to other markets in the region? Uruguay is a small market, its rules are clear and it has transparency, things that are highly appreciated by the foreign investor, although the consequences of not being a large market are also suffered. Finally he concludes, "here we build two thousand homes and the market is destroyed".