MercoPress. South Atlantic News Agency

Chilean economic crisis freezes construction of 100 buildings

More properties being completed that starting up in booming Santiago

New apartment building construction in Santiago de Chile is down by 14.6% since October 2008, according to the latest figures from real estate agency Collect GFK.
Last fall there were 560 housing projects underway, but as of April that number is down to 461, including 166 projects on hold.

Last fall there were 560 housing projects underway, but as of April that number is down to 461, including 166 projects on hold.

“We usually have between 570 and 550 jobs going on at once” said Collect GFK Manager Javier Varleta.

“I think the reason for the decline is the parallel drop in real estate mergers since September 2008. The projects that were begun at the end of 2006 are finishing up and finally on the market. There are more properties being completed than there are starting up.”

Eastern boroughs Nuñoa, Providencia, and San Miguel are showing the greatest fall in current housing developments. Most of the projects in these neighbourhoods are in the preliminary stage, which means the land is cleared, but construction hasn’t started.

This is rare, especially for Providencia, which usually ranks third place in economic prosperity in the city. All three municipalities are home to mostly middle to upper-middle class families.

“The developers are putting the brakes on a number of ventures because of the global economic crisis, even though they have already purchased the land and the building permits,” said Varleta.

Since 2001, Santiago’s real estate market has grown steadily. In 2007 however, it reached its peak and began declining.

Estación Central, however, is one borough that is contradicting the real estate trend. In October 2007, eight projects were in the works, the number increased to 13 projects in April.

The reason? Estación Central is a geographical extension of downtown Santiago, but with less expensive real estate.

By Claire Beeuwkes - Santiago Times