Property Values reach a new low in Buenos Aires
The basis of comparison is becoming increasingly smaller in the Property Values Buenos Aires property market, which is now facing more trouble. Following the report from the ‘Colegio de Escribanos’ (The Association of Notaries) they encountered a lessor but important drop in prices 14 months since June 2012. In August 2012 there was a registered annual drop of 35%, and if comparing the number of deeds in the same month of 2013 to 2011 there was a low turnaround of 48%.
In August, as reported by the statistics from the ‘Colegio de Escribanos’ of Buenos Aires, 3042 transactions where carried out, which is 19.4% less than in 2012.
According to the local notaries there has been an implicit drop of 32.6% since last year as 21,446 deeds were completed in the first 8 months of the year.
Roberto Aravelo, president of the CIA (Cámera Inmobiliaria Argentina) was not surprised by the reported fall in august because the used property market concentrates on about 85% of the total operations. Some of the 3042 deeds which were signed that month, in fact, correspond to apartments that were sold last year, according to Arevalo.
The estate agents have been alleviated by the ‘exteriorisation of capital’ programme ( the ability to money laundered funds ) launched by the government. Between the 1st of July and the 30th of September only 341 million dollars came in to the country because of Cedin’s subscription (certificates of the deposit of investment).
It’s almost a week since Cristina Kirchner said “since the beginning we said that money laundering could be a tool to help decompress the market but we did not expect it to fix everything. There were some real estate transactions passed with Cedin which marked the immediate change of those papers by physical dollars. Therefore the extension can be an extra help”. Arevalo doesn’t see the laundering extension for three months as a bad thing.
Equivalent to 100,600 USD at the official exchange rate, 561,939 Argentinean Pesos was the average amount in sales transactions in August according to the Buenos Aires Association of Notaries. Far from diminishing, the average value of operations, measured in dollars, increased 10.4% versus August 2012.
However there is always a silver lining to every story. As a consequence of all this trouble in the market, house prices have dropped back making buying more attractive than in any time in recent memory.
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