Preprint Article Version 1 This version is not peer-reviewed

Housing Prices in Unregulated Markets: Study On Verticalised Dwellings in Santiago De Chile

Version 1 : Received: 1 October 2019 / Approved: 3 October 2019 / Online: 3 October 2019 (04:26:56 CEST)

How to cite: Vergara-Perucich, F.; Aguirre-Núñez, C. Housing Prices in Unregulated Markets: Study On Verticalised Dwellings in Santiago De Chile. Preprints 2019, 2019100036 (doi: 10.20944/preprints201910.0036.v1). Vergara-Perucich, F.; Aguirre-Núñez, C. Housing Prices in Unregulated Markets: Study On Verticalised Dwellings in Santiago De Chile. Preprints 2019, 2019100036 (doi: 10.20944/preprints201910.0036.v1).

Abstract

Chile faces a serious crisis on housing affordability given that most of the population is unable to secure a house. While housing prices between 2008 increased by 70.96%, wages only increased by 20.43%. This article presents the analysis of the housing prices configuration for the main district in the country: Santiago Centro. The assessment focuses on verticalised housing buildings constructed between 2015 and 2019. The article develops an exploratory study on the price of housing in the city of Santiago de Chile, to generate a diagnosis to identify the role played by expectations of profitability when configuring that price. Based on the information generated, we seek to contribute to the discussion on public policies that advance towards the development of affordable housing for households in central communes with high urban value, as is the case of Santiago Centro. We hypothesize that profitability expectations of real estate developers play a key role in the housing prices and an adjustment in the profit ratios may increase the affordability keeping the housing market over profitable rates. The research is relevant due to the lack of data transparency in the Chilean housing market, where access to investment costs, land values, yields and house price formation are not part of the public discussion, even though this implies that many households are facing severe difficulties in paying for access to decent housing.

Subject Areas

housing; Santiago de Chile; internal rate of return; net present value; affordability; profitability index

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