Costantini answers everything: the impact of Massa’s measures, the future of the economy, property prices and where he sees opportunities

The businessman Eduardo Costantini, creator of Nordelta, has been a businessman for more than 55 years and is used to going through the vicissitudes of the Argentine economy: hyperinflation, the exit from convertibility, 2001, the exchange rate traps. “Argentine businessmen have our own business culture, we are trained in this ecosystem. What happens is that in the last 20 years the situation has worsened: the public sector grew, the same thing happened with tax pressure, the social situation became more complex, the country generated opportunities that we have not been able to take advantage of”, began the hand in hand that he had with José del Río, general secretary of LA NACION at the closing of chapter 7 of the Real Estate Summit, the annual event that sets the agenda in the sector and brings together the main references in the real estate market. The risk of hyperinflation was another of the journalist’s questions that the businessman did not dodge: “The risk is there but I don’t think it will happen”explained at the same time that he clarified that “We are already at levels between 80 and 100 percent. Then it becomes difficult to manage the economy, as well as execute business decisions”. As an example, he said that he is bidding for an entrance and a club house in one of the Nordelta neighborhoods, but he cannot advance. “The companies that participate asked us to defer the presentation of the specifications, because they do not have prices,” he outlined the current context. On the other hand, when asked why we Argentines feel “passion for dollars,” he acknowledged that “More than passion, it is a defense resource. In our history we have not been paid by bonds, deposits, or national government bonds. We have inflation but with negative rates”. So he turned to Brazil as a counterexample. “They have inflation, but positive rates. They seek to protect national savings. On the other hand, in our country the saver in pesos was punished with negative rates because they did not seek to save, but to spend to promote production and that is a huge mistake. What happens is that the debt that is in dollars does not support the level of risk, so people to protect themselves go to the dollars, to the brick, or to a very marginal extent to the stock market, “described the businessman. In addition, the creator of Nordelta acknowledged that “the free dollar is expensive” and showed some hope with the measures announced by the government. “They would tend to be a program if they are complemented by others and would provide a certain calm compared to the July crisis, but I do not see it as a definitive solution, will have relative non-blunt effect”.From a more political point of view, it stood out as a It is a good sign that the Frente de Todos recognizes the importance of making an adjustment, of lowering public spending. “This is a definition that had not been given. Neither is it to have order in the public accounts, although meeting the 2.5 I think it is practically impossible to implement this year, “he added. On the other hand, he recognized as key to see how the political situation will be compatible with what Massa announced in the face of an election year. “I think that what will be achieved, finally, will be something in between”, he warned. Looking to the future, he assured that the economy “will navigate between high inflation and the dollar that will adjust to inflation. It will be key to see what happens with the rates and what agreement is reached with the exporters because with this official dollar exports do not fly. You cannot live with such a gap. Argentines want to see evidence, factual facts that are going to take place in the coming months. There will be no miracles, you have to go through this moment calmly”.José Del Rio in dialogue with Eduardo Costantini at the Real Estate Summit, the annual meeting organized by LA NACION, Fabián Malavolta. When analyzing the property market, he recognized that the announced measures were good news for a sector that “in July began to record a further decline in sales. Regarding the prices, He clarified that the different markets must be differentiated: the one in the city and the one on the outskirts. And he gave Nordelta and Puertos as an example, which in the last two years registered record sales prices at free dollar value despite the exchange rate run. “It was a cycle that began in the second half of 2020 and extended to the first of this year and we do not expect it to continue. But anecdotally in the projects that we have in the city of Buenos Aires we are seeing a market of companies with pesos that invest in offices and in some apartments”. He also warned that he believes that the prices of residential units in the Federal Capital have hit the bottom, “unless the economy generates an exaggerated rise in the dollar that leads to a hyper, something that I really do not see” Finally, he gave sales numbers and admitted that he himself was surprised with the results: In the last two years, Nordelta and Puertos sold 2,000 pieces of land for US$400 million.. “If we continued at that pace, Puertos would be finished in ten years, but it’s not going to happen. In this project we have already sold more than 50 percent of the land and we have ahead of us the medium-density development that will complete the concept of the town-city”, he advanced. Nordelta it also has projects and is advancing with the development of an urban center of 380,000 square meters FOT with an innovacon area, a technological ecosystem with shared workspaces between companies and universities and a design center. “We are working on a tenant mix, a very challenging project,” he added. Finally, Del Rio asked him if he was looking at investment opportunities abroad, and the businessman answered yes, in Miami. But he acknowledged that “the vertiginous rise registered by properties in Miami scares him” especially given the risk of a probable recession in the United States in a context with inflation that has grown a lot and a situation of uncertainty. “The market is debating the level of aggressiveness of the Federal Reserve and the level of activity, there is a trade off because on the one hand the Reserve says it wants to raise rates to lower demand and the level of activity. This is a point from which we should learn: if there is a lot of inflation, we have to lower the level of activity, consumption and investment, even if it is unpleasant,” he reflected. In this context, he acknowledges that “the market is benevolent and believes that in a year in which the inflation rate in dollars is at seven and currencies with a core of 5.9 will drop to 2.3 and that companies will be able to highlight and inflation will not be so serious then the shares rise and in properties there is less sale but there is no drop in prices”. All this combo, explains the businessman, causes the land to increase and for example the land he bought to develop Oceana Bal Harbour, today tripled its value. “Today we are afraid to validate these prices, we are in a waiting period, three or four months to see what actually happens: today the rate that reached 5 dropped one point but a year ago it was 3.5. The key will be to see if inflation spikesendedWatch the full LA NACION Real Estate Summit here

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