House prices up by 1.7% during 2020

Chile’s housing market is slowing rapidly, due to the coronavirus pandemic. The average price of new apartments in Greater Santiago rose by 1.7% during 2020, sharply down from the previous year’s 7.32% growth. Yet on a quarterly basis, house prices increased 3.98% in Q4 2020.

Demand and supply are falling sharply. During 2020, new home sales in Greater Santiago area plummeted by 28.2% y-o-y to 22,672 units, following a 6.9% decline in 2019, according to the Chilean Chamber of Construction (CChC). Likewise in 2020, the total number and area of residential buildings authorized fell by 25.7% and 28.5% y-o-y, respectively.

Rents, rental yields: moderate yields in Santiago at 4.1%

Santiago apartment costs are low at around $3,256 per sq. m. 

Chile: typical city centre apartment buying price, monthly rent (120 sq. m)
  Buying price Rate per month Yield
Santiago   $390,720   $1,336 4.1%

Recent news. Chile’s economy shrank by almost 6% in 2020, following annual growth of 1.1% in 2019, 4% in 2018, 1.2% in 2017, and 1.7% in 2016, amidst the coronavirus pandemic. It was the biggest decline since the Latin American debt crisis of the 1980s.

The copper-rich South American country is projected to return to growth this year, with a real GDP growth forecast of 4.5%, according to the International Monetary Fund (IMF).