Real estate in Buenos Aires is approximately one eighth of the cost of property in London or New York. We know all about ‘apples and apples’ but the huge difference does make you feel that Buenos Aires is somewhat undervalued when you consider the main points in this article written by Buenos Aires Stay.
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From parity with the United States dollar in 2001, the peso devalued by an average three to one creating a wonderful climate for investment - Argentina became cheap.
With its Old World charm, Buenos Aires is one of those places that people just love. Believe us when we say you will love the city. Visitors come in increasing numbers every year and many return live or invest in property.
We must point out a dichotomy that might astound you. Although for some time investors found Argentina less appealing, property, land and latterly tourism are cornerstones of Argentine investment and for a few canny international investors (us). This article means you are now one of the lucky few in the know. The city, known as the Queen of the Plata (River) and the Paris of the South, must be one of the best cities in the world in which to invest in real estate.
In August of 2006, the Buenos Aires bureau of records recorded 5,583 deeds involved in real estate purchases worth a total of about 330.7 million US dollars. Argentina is one of the world's fastest growing economies and Buenos Aires is one of the world's fastest growing cities.
Estimates put Argentina's economic growth at over 8% annually for the last 5 years and although nobody trusts what the government ‘spins’ the media, we kid you not that property investment in Buenos Aires is by far the surest property investment opportunity you will find in a world full of uncertainty. We expect Argentina will suffer from the world’s dire economic depression, and not least, the fall in world consumption with the knock on downward trend in commodity prices are going to take the country either close to or into recession. However, there are factors in the micro-economy of Buenos Aires that make property investment safer and better insulated than either London or New York.
You are sceptical. So were we until fully understanding the Buenos Aires real estate sector, its realities, and its peculiarities that make it so very different from many other real estate sectors throughout the world. We start by saying, ‘what credit crunch and what no credit?’ The country as a whole operates without credit (national average 10%). Residential property investment is largely cash, mortgages as we know them do not exist, and funding is never more than 50% of the property value supported by assets and over terms as short as 3 to 15 years. We also point out that we restrict our advice to a number of key investment districts (barrios) in Capital Federal and greater Buenos Aires. Read more about Buenos Aires>go. Read more about the barrios>go
Unlike the burst real estate bubble in the Northern Hemisphere, most specialists believe growth in property values is sustainable in the long term in certain parts of Argentina and in particular Capital Federal, why? "It is not a bubble because cash is king and underpins the growth in the sector – supply and demand dictate property prices and outlandish supplies of credit neither fuels nor sustains the Argentine property sector, it is an orderly market. The capital used for construction, buying and refurbishment is real, and there is practically no bank financing [of construction projects]," says Andrew McCance, of Mainline Security Ltd, an investor in Buenos Aires real estate. “I am no financial or property guru, so people need to complete their own research, but no doubt they will find that bricks have always been a relatively stable investment in Buenos Aires. That will continue as Argentines learnt long before the rest of the world that banks and government are not to be trusted.” Therefore, the reality and peculiarity of the Argentine property investment sector is that today it offers one of the few orderly markets. Andrew is fond of pointing out that there is the first world, the third world, Japan, China, and then there is Argentina. He also points out that Buenos Aires is the jewel of Argentina’s tilted crown. He also feels that Puerto Madero is horribly overvalued.
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Learn to avoid the sharks in Buenos Aires real estate
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