It is well known that the real estate and construction industry is facing a severe crisis. Among the main causes of this challenging scenario are the difficulty in accessing credit, rising interest rates, inflation, excess housing inventory, and the increasing struggle to gather the necessary down payment to purchase a home.

In 2020, real estate purchase agreements plummeted, primarily due to the pandemic and the resulting economic crisis, which caused a drop in investments that had traditionally supported the sector’s financing. Although 2021 showed signs of recovery, the following years remained significantly below the average levels of the previous decades.

In 2022, the real estate market experienced a sharp slowdown, with a notable decline in property transactions compared to the historical average. This slowdown was confirmed by the Housing Price Index published by the Central Bank that year. In 2023, new home sales in the Metropolitan Region hit a historic low—falling even below the volumes recorded in 2020 during the public health emergency—with only 31,000 units sold (La Tercera). This trend continued in 2024. During the first quarter, home sales dropped by 13%, reaching one of the lowest sales volumes of the past decade. In the second quarter, the housing supply decreased by 2% compared to the same period the previous year.

The alarming figures recorded since 2022 have led to growing uncertainty and distrust in the sector, a decline in investment, and a rise in liquidation and reorganization proceedings for companies unable to sustain their operations.

While some believe that economic and financial conditions will not change significantly, others are more optimistic, anticipating a more favorable outlook this year.

Housing sales are expected to grow by 8%. This forecast is based on several positive developments in the national context: reforms to the General Law on Urban Planning and Construction; a gradual market recovery supported by a more stable macroeconomic environment; lower inflation; a progressive correction of available inventory; greater credit access flexibility; more attractive interest rates; and renewed efforts by municipalities to update zoning regulations, improve urban planning, and revitalize abandoned areas in response to housing demand.

Undoubtedly, there is still a long road ahead for the recovery of the sector. However, with a gradual market adjustment, legal reforms, municipal initiatives, and increasing financing flexibility, the outlook for the real estate and construction industry in 2025 appears more promising. Still, it is crucial to take advantage of these opportunities to make tangible progress and prevent the continued deterioration of the industry.

At Alza, we see this moment as a unique opportunity to identify high-quality real estate projects that are struggling to access bank financing or have stalled due to high entry barriers. We are constantly looking for financial solutions that bring value to real estate developers—whether by providing liquidity to launch new projects, financing land acquisitions, or offering the backing needed to complete unit sales at competitive prices. We believe that 2025 will bring major opportunities in the private debt market, enabling us to support the real estate industry in multiple ways: helping it regain its previous levels of activity, launch new projects, and contribute meaningfully to resolving the ongoing housing crisis.

Enzo Folch – Analista de Inversiones