House prices up by a meagre 0.55% y-o-y in Q3 2020
Chile’s housing market is slowing rapidly, as the coronavirus pandemic shatters its economy. The average price of new apartments in Greater Santiago rose by a minuscule 0.55% during the year to Q3 2020, sharply down from the previous year’s 5.81% growth. In fact the last two quarters are the country’s weakest performance since Q4 2016. On a quarterly basis, house prices increased slightly by 0.8% in Q3 2020.
Demand and supply are falling. In the first nine months of 2020, new home sales in Greater Santiago area plummeted by 45% y-o-y to 13,919 units, following a 6.9% decline in 2019, according to the Chilean Chamber of Construction (CChC). Likewise the first eight months of 2020, the total number and area of residential buildings authorized fell by 28.1% and 31.6% 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 9.1% year-on-year in Q3 2020, following a record contraction of 14.5% in Q2 and a miniscule growth of 0.3% in Q1, amidst the coronavirus pandemic. On a seasonally-adjusted quarterly basis, economic activity grew 5.2% in Q3, a partial recovery from a record 13.5% contraction in the previous quarter.
The Central Bank of Chile expects the economy to contract 5.5% to 7.5% this year, the biggest decline since the Latin American debt crisis of the 1980s.