Syngirl, you're absolutely right. Real estate is one of the only 'safe' investments if you're knee deep in green backs in Argentina. However, with the contraction of credit around the world making it more difficult for foreign investors to extend themselves overseas combined with rising taxes and falling commodities prices that limit farmers earnings, you have a severe contraction in demand. So while those that do have money will look towards real estate no matter what the market is doing, the number of people that have money available to invest is (or at least should be) much lower than the peak of the boom in 2007.
This is just one of many recent articles that look at the commercial real estate market from a perspective which is not that of the Argentine version of the National Association of Realtors.
http://rrii.iprofesional.com/notas/...33000-edificios-obras-y-locales-cerrados.html
Also, your numbers might be off a bit. For example, if you take the average cost of a one-bedroom in REcoleta at $2000 a square meter, and the average size around 50 sq m, you're looking at $100,000 to buy (which wouldn't even get you a new construction apt). Rents to LOCALS are averaging around $2000 pesos for a one-bedroom, or about $500 - a 6% return which is not too shabby, unless you take into account the immense risk in renting out your apartment on a common two-year contract. Laws favor tenants, and unless you're willing to hire someone to 'remove' them, you're stuck with unpaying tenants who will more than likely trash your place. You are also limited by local salaries when currency spikes occur, which never outpace inflation. Also, the Argentine Central Bank has done all it can to peg the peso to the dollar, but internal and external pressures could make that a pipe dream in the future. So if the dollar rises to 5-1, something that is not outside of the current realm of possibilities, you are suddenly making just $400 US per month, as you are limited by how much salaries are adjusted in Buenos Aires. People made crazy returns by renting to foreigners, and that market is saturated.
You'd get a much better return investing your money in Florida or another sun belt state, where prices are close to their bottom and you're protected by a strong judicial system. I just think it's important that people consider this before following the crowd and buying an apartment in Buenos Aires, particularly now. If you do, you should be prepared for HUGE swings in the market, both up and down.
This is just one of many recent articles that look at the commercial real estate market from a perspective which is not that of the Argentine version of the National Association of Realtors.
http://rrii.iprofesional.com/notas/...33000-edificios-obras-y-locales-cerrados.html
Also, your numbers might be off a bit. For example, if you take the average cost of a one-bedroom in REcoleta at $2000 a square meter, and the average size around 50 sq m, you're looking at $100,000 to buy (which wouldn't even get you a new construction apt). Rents to LOCALS are averaging around $2000 pesos for a one-bedroom, or about $500 - a 6% return which is not too shabby, unless you take into account the immense risk in renting out your apartment on a common two-year contract. Laws favor tenants, and unless you're willing to hire someone to 'remove' them, you're stuck with unpaying tenants who will more than likely trash your place. You are also limited by local salaries when currency spikes occur, which never outpace inflation. Also, the Argentine Central Bank has done all it can to peg the peso to the dollar, but internal and external pressures could make that a pipe dream in the future. So if the dollar rises to 5-1, something that is not outside of the current realm of possibilities, you are suddenly making just $400 US per month, as you are limited by how much salaries are adjusted in Buenos Aires. People made crazy returns by renting to foreigners, and that market is saturated.
You'd get a much better return investing your money in Florida or another sun belt state, where prices are close to their bottom and you're protected by a strong judicial system. I just think it's important that people consider this before following the crowd and buying an apartment in Buenos Aires, particularly now. If you do, you should be prepared for HUGE swings in the market, both up and down.
