Nick Bailey, Global CEO of Remax: “It's a shock that this market is mostly cash”

The Argentine property market has several peculiarities that make it a rarity in the real estate world: most property purchases are made in cash, without mortgages; and in a global context of rising prices and lack of supply of properties for sale, it goes in the opposite direction: local prices fall in dollars as the stock of real estate available for purchase rises.

After two years of pandemic, the global company Remax once again brought its network together in Argentina and Uruguay at a convention, bringing Nick Bailey, the global CEO of the real estate services company, to Buenos Aires. The manager, with more than 20 years of experience in the real estate business, talked with Infobae about the reality of the sector in Argentina and in the world.

After 16 years in Argentina, the Remax network has 160 offices attached to the brand, in 45 cities in 12 provinces of the country. In 2022 they plan to open 14 more offices. And by 2030 they expect to have 260 offices in the country, with a total of 130,000 properties in the portfolio and a 30% share of the real estate market.

— What opportunities do you see for the real estate business in Argentina?

— Remax is a company that provides services to entrepreneurs in each market. It depends on what they can be. They have the opportunity to continue growing here. There was a great growth of the brand in Argentina and there are opportunities to continue growing.

— What is your analysis of the real estate market in Argentina?

— Real estate is, in general, very local. It changes from city to city and also between one place in the city and another. Each country is unique. But there are three basic human needs: food, clothing and shelter. And what our business does is provide a shelter, a house, whether to buy, sell or rent. It's helping people find their homes. The process can be cash, financed in different terms or with different types of licenses. The core of the business is helping people find homes.

— How did the pandemic change the real estate market?

— It's the first time in my 26 years in this business that I've seen the same things affecting everyone around the world. Home has never been more important to any of us, in our generation. People had new desires to live in a different way. The home became an office and classroom; and many people wanted more outdoor space because of restrictions on going out. There were countries with months and months of quarantine and others with a couple of weeks. The way the pandemic affected people's lives was very different, but everyone had the issue of housing in their head. Never was home such an important issue.

— And what are the changes that will last?

— The balance between home and work changed. Many people have the opportunity to work longer from home. However, people are getting back together. It is a human desire to connect, eye contact. Many people are going to return to the offices and their pre-pandemic lives, but the balance between home and work is here to stay. With more options available and more flexibility.

— And how does this impact the business?

— In many countries, the pandemic helped because many people decided to move. Not specifically in Argentina, but in the United States. At one point last summer 73% of homeowners had the idea of moving. More people consider it even if not everyone is going to. But the time spent traveling to work is put into the balance. The one who lives near the office now has the possibility to move further and have more space. And we also see people who are moving again near their work. Some things are temporary, but people are looking for flexibility between home and work.

— Did prices in general tend to rise?

— In other markets prices generally increased by a double digit of appreciation during the pandemic; but I think that is not the case in Argentina.

— What are the fastest growing Remax markets?

— Canada leads growth for the entire network. But every market is different, every regional business owner handles it in the way they see best. That's the way the Remax network was designed. The brand is similar but the way the business is run responds to each local owner. Growth expectations are different in the more than 110 countries where the brand is located. Each one is run like a local business.

— In Argentina the company had complaints against public schools of hammermen and a request for suspension in the courts, how does it affect them?

— It doesn't make sense what is happening in Argentina. These are entrepreneurs who build a business, earning a living for their families, while helping people find homes.

— Does this situation occur in other markets?

— This specific situation is unique in Argentina. In the United States, there are multiple services, organizations, licenses and requirements, very different than in Argentina. Some of the things that happen here are quite unique.

— What recent changes in the market do you think will last?

— Video conferencing and Zoom were not new technologies. Pre-pandemic there was a lot of technology that wasn't being used. It's an example of what's going to be left. Using technology for human interaction, not to replace it but a combination. Consumers with access to information are leading to a level of transparency in the real estate business. With mobile devices they can have more information and do more research.

— What are the challenges of real estate at a global level?

— In many markets the biggest challenge is inventory (the active supply of properties on the market). It's different from what happens in Argentina.

“And the rental market?

— The rental business is bigger here. In Manhattan, for example, it is 73% rentals but in the rest of the United States it is 70% landlords. Another difference is that 63% have mortgages, which is not the case here and is almost all effective. In cities with a high population density, the rental business is much higher.

— Are there other markets where cash sales are handled as in Argentina?

— There is a lot of use of cash payment (cash or transfers) in the luxury market or resorts. At resorts in Canada or in Aspen, Colorado, where I live. Also the market celebrities. In that type of market we see a lot of cash, but not in general. In Canada, mortgage loans must be refinanced every five years. It's a requirement. In the United States you can have loans for 30 years and never refinance. It is fascinating to see how real estate works in different markets. It's a shock that this market is mostly cash, cash. It's very different. Remax has been founded on entrepreneurs, since 1973. The growth of the brand around the world is due to entrepreneurs who want to be in business, but not just on their own. Local entrepreneurs build their business and we couldn't be in Argentina without that knowledge they have. We give them the tools, the technology and the marketing. They are the three keys to success.

KEEP READING: