Real Estate in Buenos Aires: Opportunity?
This post is also available in: Spanish
Both Argentina and the City of Buenos Aires, stand out for an endless number of singularities. These range from cultural diversity, a variety of landscapes and climates, through the quality of wine and meat, to artistic production. Another of the innumerable peculiarities that define Argentina and, more specifically, its administrative, cultural, and financial capital, is its unique real estate market.
The real estate market in the City of Buenos Aires has a main distinctive feature: it’s not negotiated in the local currency but in USD dollars. Why? There are as many theories as specialists in the subject. The truth is that unlike its neighbor Brazil, for example, where properties are traded in Brazilian real, in Argentina, and especially in the City of Buenos Aires, the prices of apartments and houses are in US dollars. Whoever wants to buy must either have dollars in cash or have the equivalent in pesos (according to the exchange rate of the day of the transaction).
Pesos or dollars?
As the value of the dollar varies, the amount of pesos needed to buy a property fluctuates as well. This is to say that, an individual with dollars, has less to worry about. Whoever has pesos, in case the peso goes down, would need more pesos to buy the equivalent amount of dollars. This represents an advantage both for Argentines who already have their money in dollars, and foreigners who are interested in acquiring property in Argentina.
What’s the situation today?
According to the consulting firm Reporte Inmobiliario, in 2017, real estate in Buenos Aires increased by an average of 12%, in dollars. That is 28% in pesos. This rise is above inflation and the cost of construction. Why? Argentina is experiencing an intense process of extraordinary transformation. After 12 consecutive years of populist, protectionist, and statist government headed by the Kirchner marriage, a new administration won the last presidential elections in 2015. That is, to the phenomenon of the always unique real estate market of the country and specifically of Buenos Aires, today we must add a number of political ingredients, which make the situation an interesting opportunity to consider.
The old administration
The last few years of Kirchner’s administration were characterized by a decline in economic activity, growing inflation, and suspicions of corruption on a large scale. The real estate market was one of the most affected, if not the most. As inflation increased dramatically, construction activity froze, and the peso depreciated, the real estate market was completely paralyzed.
The new administration
The government led by President Mauricio Macri began a series of reforms that included getting rid of limitations to purchase American dollars, anti-money laundering policies, incentives for foreign investment, and redistribution of resources in general. These changes had an impact on all spheres of economic activity, and the real estate market was not an exception.
Buy in Buenos Aires today
After years of a paralyzed market, with few transactions, today the City of Buenos Aires has become a world of opportunities. Only going for a walk around its streets to see the number of properties for sale, it’s surprising. Transactions have increased dramatically, supply is varied, and demand grows.
There are currently two types of buyers: on the one hand, foreigners and Argentines who have dollars, are looking for opportunities to buy, relying on the new course of the South American country. On the other hand, Argentines who may not have enough dollars to buy, but their credit history allows them to have access to the new financing plans to buy houses and departments.
The average square meter costs, on average, USD $ 2,000. Some areas represent phenomenal opportunities. Whoever has dollars, has negotiating power. For their part, Argentines who wish to buy have access to a new line of mortgage loans launched by the brand-new administration. The market is in motion, the alternatives are many, the city very interesting, and its potential immense.
Fuente: Reporte Inmobiliario
Traditional areas of the city, such as Recoleta and Retiro, offer high-level properties, with owners willing to negotiate the price. At the same time, in San Telmo, Montserrat, and Barracas, it’s possible to find stylish properties for reasonable prices. Because the market is adjusting, prices are not fully established. This means that deals can be closed based on the needs of the buyer and the urgency of the seller. Here it’s important to remember that there are sellers who have been trying to sell their apartments for years and intend to take advantage of this momentum as soon as possible.
Gateway to South America -Buenos Aires can help you get your house or apartment in Buenos Aires, whether it’s to live in or as an investment. Our team of specialists handles products of the highest quality and can assist you in everything that has to do with finding the place, negotiate, and administrative matters.
If you are interested in investing in the real estate market in Buenos Aires, this is the time. The real estate market in the Argentine capital is revolutionized, and as with all sudden movements, unique opportunities come up.
Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and disposal.
About Geoffrey McRae
Geoffrey McRae is the founder of GTSA - Marketing. He is a New Zealander with a strong Agro-business and Real Estate background spanning over 30 years. Prior to coming to South America, he was one of Australasia's most successful Real Estate negotiators reaching the highest level in the industry. He has a reputation as a brave and a formidable negotiator and creative 'deal maker'. His reputation for discretion, experience, and expertise have involved him in representing some of the world's highest profile investors. I hope you enjoy reading our news site. Please share it on your social media below.