Another Article Believes Ar Real Estate Is Going To Rebound

[garryl]

There is saying in Chinese : contiguous bag things are always followed by good things. We have enough mal things in Argentina, it's time to have a little bit good luck. If you have a second home in Argentina, this could be a good news:


http://www.marketwatch.com/story/five-countries-where-you-should-buy-a-second-home-2015-02-27

 

[thorsten]

I'm not so sure about that: at the current level, apartments in B.A. are not really cheap. But what makes me wonder is: there are a ton of apartment buildings build each year. It makes sense as any local who has money and doesn't want to (or doesn't have the capabilities) move it out of the country should buy real estate as it is inflation safe. However, if we assume the economy of Argentina will go up and the currency restrictions are removed, wouldn't it be likely that a lot of people who have several apartments here cash them in, thus increasing the offer side of the market and decreasing the prices? Also, as an investment, I'd guess you have to have an apartment in one of the tourist centers with lots of vacation rental, as a local long-term rent is way too low to achieve a reasonable ROI.

 

[Sleuth]

What are you comparing prices to? The price per square meter in Buenos Aires is still some of the least expensive real estate in any major city in the world. Plus, the market is a cash market which really lowers the amount of speculation here, meaning that prices are not overly inflated IMHO. Whenever there is a correction in the market, it has only seemed to be a small dip here.

People do not cash in their apartments here. They use them instead of banks which they do not trust. it is a strange market - apartments that have been on the market for some time will actually have their sale prices raised rather than lowered.

if the currency restrictions are removed, the market will boom. Real estate prices will go back to being all in dollars and people will not have to worry about taking pesos for their apartments.

I agree that long-term rentals seem to be a low ROI, but you have to remember that people do not have mortgages. They have very low expenses and own the bricks.

 

[estebandepraga]

To really cash in , you have to wait till the bottoms falls out and it's not yet! But then you must be ready in situ with the money in your backpack. And you have to act fast to get a great property at a great price AND IT IS A FULL TIME JOB! I speak from personal experience and in this matter I have never been wrong!

 

[thorsten]

Sleuth: the apartments I've looked at so far were obviously cheaper than something in NYC or London, but not so much cheaper than cities like Madrid or Berlin - plus the expected rental income is lower here. That's why I don't consider it "really cheap". Your point about not selling apartments because of lack of trust in banks make sense, I just wonder if that would change if you could put your money into a foreign bank which is not known for stealing from you. But this might not be the case as people have very bad experiences and thus a lack of trust in financial markets in general. All things considered, I'm still not convinced if it's a good investment opportunity (as opposed to buying an apartment to live at least partially in it): even if you don't have a mortgage, this would just mean you have the money free in cash and thus could invest it alternatively, where you might probably get the same stable income without the associated risks and long-term binding of capital in real estate.

 

[estebandepraga]

Trust me all when I say I have over 35 years expeience in this matter and have sold and bought many properties both here and abroad(USA and Europe)
It can be a great investment but not yet! Otherwise I wouldn't be on line now I'd be out looking at properties!
BTW Thorsten, I go often to Berlin a city I love and have been doing so forever. Several years it was a steal to buy there as you know but while still cheap by German standards, not like it was. I never bought there as I wanted smaller places in older classic well-built buildings and could never find what I wanted AND I LOOKED!

 

[thorsten]

Out of curiosity esteban, how much % would the current market here go down until you consider investing? Pretty sure we won't see a similar "buyers heaven" as after the last crisis, but I'd be interested what would be your prediction of how much it will go down.

 

[estebandepraga]

For me at least 25-35% but I believe it could be more While I don't wish upon this country a repeat of 2001-2, prices were down up to 80% in some good properties.
But as my Irish father used to say,(the only off-colour thing he ever said) "S...t or get off the pot = when you see the deal act quickly!
I wish the same would happen with Paris prices!

 

[garryl]

Sleuth: the apartments I've looked at so far were obviously cheaper than something in NYC or London, but not so much cheaper than cities like Madrid or Berlin - plus the expected rental income is lower here. That's why I don't consider it "really cheap". Your point about not selling apartments because of lack of trust in banks make sense, I just wonder if that would change if you could put your money into a foreign bank which is not known for stealing from you. But this might not be the case as people have very bad experiences and thus a lack of trust in financial markets in general. All things considered, I'm still not convinced if it's a good investment opportunity (as opposed to buying an apartment to live at least partially in it): even if you don't have a mortgage, this would just mean you have the money free in cash and thus could invest it alternatively, where you might probably get the same stable income without the associated risks and long-term binding of capital in real estate.

The rental price is low for now, that doesn't mean it will be low forever. There are a lot less Americans in the city now. People have been telling me that I asked a little more than the market rate, but there was someone from central America said $1200/month is cheap, he will take it. He couldn't find a rental like this in his country for $1200. Argentina rental market is artificially low due to the blue rate and large exodus of expats.

 

[garryl]

For me at least 25-35% but I believe it could be more While I don't wish upon this country a repeat of 2001-2, prices were down up to 80% in some good properties.
But as my Irish father used to say,(the only off-colour thing he ever said) "S...t or get off the pot = when you see the deal act quickly!
I wish the same would happen with Paris prices!

There could be more room to go down, but it's hard for Argentina RE market to go down 25-35%. What will trigger that ? A crisis perhaps. Because rental price is
already low, landlords are used to the bad situation and find a way to survive for now. It really needs a crisis to bring the market down, then I will invest for sure (by selling my blood )