Strong growth shows an increase in building permits in some municipalities of the Metropolitan Region

La Cisterna, La Pintana, San Joaquín, Vitacura and Puente Alto are some of the municipalities that had an increase in number for building permits. 

House construction decreased by 5% in 2019 (annualised) compared to in 2016. This is measured by Building Permits, ‘Permisos de Edificación’ (PE), from a study by Colliers International.

This report also shows a higher rate of city migration in La Cisterna, La Pintana, San Joaquin, Vitacura and Puente Alto.

‘The increase of ‘PE’ in the communes with greater growth (except Vitacura) is due to an increase in real estate offers. In this sense, La Pintana stands out as it has had intense investment for RED (ExTransantiago). This substantially modified and improved Santa Rosa Street. It gives the commune a major structural transport axis.’ The consultant of the Brokerage Area of Colliers International, Reinaldo Gleisner, states this. 

‘At the same time,’ he says, ‘the case of La Cisterna is notable. It is a clear example of the displacement of the supply of real estate along the Metro axis, following a validated sector.

In this case, San Miguel is projected along Gran Avenida to the commune of La Cisterna. Unfortunately, in the short-term view, La Cisterna modified its Regulatory Plan. This severely limits the development options for real estate’ 

Meanwhile, the executive highlights Puente Alto, ‘which shows high real estate activity. It is noted here that a lag of the metro has affected real estate activity, particularly in densification. This is given that La Florida extended its real estate diversification a few years ago; La Florida being another commune between Santiago and Puente Alto.’

Vitcura also shows a significant increase in building permits. ‘The sectors are progressing from houses to buildings. Despite the high value of land in this area, new apartments are compatible with market demand,’ the executive says. 

Less apartments

A decrease of 12% in apartment permits is pointed out in Colliers for the Metropolitan Region; this is in regards to the submarkets of houses and apartments.

‘The decrease is not due to lack of demand as prices would not continue to rise at rates close to 10%. It is due to the recent and severe restrictions on the regulatory conditions for high-rise buildings,’ says Reinaldo Gleisner, consultant to the Brokerage Area of ​​Colliers International.

He states that ‘La Cisterna has a great boom in PE, as an extension of the building around Gran Avenida in San Miguel. This last commune has implemented a new Communal Regulatory Plan (CRP) much more restrictive than the previous one. In buyers’ perceptions, La Cisterna is a much smaller commune.’

‘Renca has incorporated more buildings in a natural evolution of houses in the range of 1,500 to 2,500 UF; the majority of buildings have 4 floors. San Joaquín is also experiencing densification as an extension for the Santiago and Ñuñoa communes. This densification will be halted with the approval of the new PRC, pending on the final approval’.

Puente Alto ‘is slowly incorporating taller buildings, after being a commune exclusively of houses. It’s a typical condition for communes that are far from the center of the area. With the improvement of transport connections and intense development of La Florida, this commune increases the attractiveness of apartments,’ says Reinaldo Gleisner.

Furthermore, Vitacura ‘is in the process of densification higher value products compared to other communes such as Lo Barnechea and Chicureo. This offers an urban context of the highest quality and services of the highest level.’

House Offer

Regarding the houses, these represent around 20% of the real estate offer in the Metropolitan Region. In the previous decade it represented between 60% and 40%, the figures of Colliers International indicate.

This is one of the biggest changes in the habit of Santiago, adds the consultant.

‘Within this period, the supply of houses has increased by 34%. The total of houses being built has decreased by 5% in the Metropolitan Region. Also, it is evident that the increase in housing supply occurs in the peripheral communes. This is especially in the south and in the communes of the Metropolitan Region; they are not considered as part of Greater Santiago.’

He adds that La Pintana has been taking more prominence, for better connectivity and absorbing unsatisfied demand.

‘In turn, Puente Alto is boosting its capacity to absorb demand for housing, competing with the farthest communes of Santiago, with the advantage of a Metro line. However, it is still very insufficient.’

For its part, ‘San Bernardo maintains an important presence in the supply of houses. In addition, the connectivity improvements that are expected with the advance of fast trains, allows to enhance the attractiveness for those who prefer houses.’

Disclaimer:
Translated from ‘Fuerte crecimiento muestran los permisos de edificación en algunas comunas de la Región Metropolitana‘