GTSA – Activity Update for November 2018
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GTSA REGIONAL UPDATE
Here is a short update on what’s happening in our region over the past few months.
Residential – Buenos Aires
The Buenos Aires local residential market has slowed due to the Peso devaluation, poor financing options, and very high inflation. However, there has been a very high influx of tourists, some of which are turning into residential buyers due to the low prices.
Farm Market: The farm market is still suffering from a lack of profitability in some sectors and as of yet unchanged “ley de terrias” which prevents foreign investors from buying large commercial farms. (foreigners are still restricted to farms under 1,000 ha and a host of other rules). Despite the obstacles in front of investors looking to buy, some are taking the risk on the basis that the business climate and rules will become more market-friendly as Argentina modernises its economy. Last year’s severe drought and then excessive rainfall also did not add to local confidence.
Lifestyle: Some market niches are still very active due to the bargain prices. For example the Cafayate region in the north-west of Argentina.
Overview: Argentina is in a deep recession so it is going through a period of navel-gazing. After decades of leftist Peronist policies, the new centrist government has introduced a raft of measures to lessen corruption, strengthen the institutions, introduce the rule of law, encourage foreign investment and grow the economy. Much of the work has been done but the benefits have been slow to become evident to the middle class. Private economists believe the economy will start growing again in the second half of next year. The middle class certainly hope so as after massive devaluations they are financially exhausted.
Brazil: Since their devaluation and a softening of prices, serious buyers are returning to the market looking for commercial opportunities. Some very big farm sales are taking place.
Overview: With the recent election of Jair Bolsonaro as president and a positive change in many of the important political positions throughout the country from the previous administration, business people believe they will put in place the policies needed to get Brazil out of one of the most serious recession of recent times.
Chile: This market is still proving active with considerable interest being shown by foreign buyers along with a number of sales taking place of commercial farms and large horticulture units.
Overview: The previous market was for dairy farms but due to a number of local and international trends this has slowed to a trickle and now buyers are more interested in properties suitable for horticulture or viticulture.
Paraguay: This market is less active than previously but there are some market niches. Our brokers are busy with potential fund buyers looking for developed farms for our clients of 1,000 ha or more.
Peru: Clients are actively looking for irrigated properties of 400 ha and above for horticulture.
Uruguay: Farm prices have dropped in line with its neighbours, making them good value again for investors. We are active with medium sized investors looking to buy into this market at lower price levels.
Overview: GTSA has strengthened its agro coverage in Uruguay with the recent alliance with one of the most important Agro players in the country. This should result in more high-quality farm listings and better customer support services.
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Post available in: English