Economy and Real Estate Market June 2025

Economic landscape and trends in the real estate market in Chile as of June 2025: international uncertainty, local performance better than expected in the first half, copper behavior, and signs of slow and regionalized recovery in housing.

International Scenario: Global Uncertainty and Trade Tensions

The global economy faces challenges due to trade and geopolitical tensions, including the conflict between Israel and Iran. Tariff measures adopted by the United States have increased uncertainty in international trade; so far, the direct impact on Chile has been limited, although consensus is that the U.S. will be significantly affected in terms of prices and economic activity.

Chilean Economy: Better Than Expected in the First Half

In Chile, performance during the first half of 2025 exceeded expectations, driven by exporting sectors. The Central Bank raised its annual growth projection to between 2.0% and 2.75%. The possibility of adjustments in the Monetary Policy Rate remains, with the primary goal of controlling inflation.

Copper: High Demand and New Market Distortions

The price of copper averages $4.29 per pound in 2025, an increase of 3.6% compared to the previous year. However, the measures announced by the U.S. administration, including a 50% tariff on copper imports to the U.S., have created a notable decoupling between the U.S. domestic market and the international market, with internal prices exceeding $5.68 per pound.

Although only 11% of Chile's copper exports are destined for the U.S., these measures have caused logistical and commercial distortions. In response, shipments could be redirected to Asia and Europe, maintaining Chile's leadership in the market but increasing price volatility and supply chain challenges.

U.S., China, and Their Influence on the Local Market

The United States shows inflation close to its target, although its economic policy orientation has been erratic. China is facing weak domestic consumption but is seeing a recovery in industrial production and a reorientation of part of its foreign trade. Both factors affect the stability of the Chilean peso and the demand for raw materials.

Real Estate Market in Chile: Weak, but with Slow Signs of Recovery

The national real estate market continues to face difficulties. According to the Chilean Construction Chamber, home sales in the first quarter of 2025 fell by 18% compared to the previous quarter; during that period, apartment sales dropped by 20% and house sales by 7%. These figures remain below the historical average since late 2021.

Currently, there are over 106,000 units available in the country, of which 42,000 are finished and ready for immediate delivery. An absorption horizon of approximately 36 months is estimated, reflecting the market's slowness.

Regional Behavior: Southern Chile Shows a Slow Recovery

Regionally, the north recorded a 24% drop in sales, while the south experienced a slight recovery of 11%. This rebound coincides with increased interest in fields, land, and estates in areas such as Los Ríos, Los Lagos, Aysén, and Magallanes, where land continues to be viewed as a long-term investment.

New Policies: A Breath of Fresh Air for the Sector?

The subsidy for mortgage rates is beginning to show effects: to date, more than 6,400 homes valued under 4,000 UF have been sold under this benefit. Nevertheless, the expected recovery is moderate, with an annual sales growth projection of 9% compared to 2024, still below the averages of the previous decade.

Overall, the market is moving towards a slow and heterogeneous recovery, conditioned by the evolution of copper prices, public policies, and regional differences in demand.