How do people work out how much a property in Argentina is actually worth?

[Churchill]

Say there are 2 apartments in the same building, same floor and in more or less the same condition. Vendor 1 wants 250k for theirs yet vendor 2 wants 300k for theirs. What information is there in the public domain to help a buyer decide which is the closer to a fair value? I see so many prices on Argenprop and Zonaprop that vary wildly and seem as if they are plucked out of thin air. I occasionally see these avg price per sq metre graphics in newspapers etc but dont know how reliable they actually are. Surely people dont trust estate agents to guide them on these matters?

 

[rickulivi]

I believe the problem occurs because there is not general database that records all the information. In California, each County maintains a public record with the actual sales data of every property. Under current circumstances, it would be impossible to create an Argentina version of Zillow, for example. I think the problem lies with the escribanos.

 

[Churchill]

Same in the UK, every sale price is recorded making it fairly easy for buyers to compare prices and work out approx values.

 

[Bajo_cero2]

With an economy close to a major crisis there are no prices and owners ask whatever. For example, I was renting a 100 mt2 appartment at Recoleta por 8 years. I paid 23.000 and when we had to negociate the new contract, he ask for 1000 usd that means about 45.000. I finally rented a few blocks far for 32.000 with parking and 160 mt2.
The owner of my former home also wanted to sell it. My real estate agent told me that the value of it was 175.000 usd while the owner asked for 325.000.

 

[brandon]

I recently went thru this when we moved. The prices are all over and a fair mkt price doesn't seem to exist due to lack of info on comps or recent sales. I understand that until recently, sales were off the books, partly or fully in black, to avoid or reduce tax. So only the parties involved knew the transaction price.
Zonaprop is a good start, you'll start to see some properties averaging close and a few outliers. I feel many list for a dream price and negotiate down. It really depends on the situation of the seller.
We found 2 identical plans in the same building, 1 floor apart, with diff agents. Made offers to both about 10% below their similar asking price. 1 was willing to negotiate and the other no. The 2nd is still for sale 6 months later.

 

[BAJeffpat]

I recently went thru this when we moved. The prices are all over and a fair mkt price doesn't seem to exist due to lack of info on comps or recent sales. I understand that until recently, sales were off the books, partly or fully in black, to avoid or reduce tax. So only the parties involved knew the transaction price.
Zonaprop is a good start, you'll start to see some properties averaging close and a few outliers. I feel many list for a dream price and negotiate down. It really depends on the situation of the seller.
We found 2 identical plans in the same building, 1 floor apart, with diff agents. Made offers to both about 10% below their similar asking price. 1 was willing to negotiate and the other no. The 2nd is still for sale 6 months later.

I think you hit the nail on the head here. Assuming that the price that a property is "actually worth" is market equilibrium (the point where the suply curve hits the demand curve on the graph), to have "perfect competition" the following things must be true:

• A large number of buyers and sellers – A large number of consumers with the willingness and ability to buy the product at a certain price, and a large number of producers with the willingness and ability to supply the product at a certain price.
• Perfect information – All consumers and producers know all prices of products and utilities they would get from owning each product.
• Homogeneous products – The products are perfect substitutes for each other, (i.e., the qualities and characteristics of a market good or service do not vary between different suppliers).[4]
• Well defined property rights – These determine what may be sold, as well as what rights are conferred on the buyer.
• No barriers to entry or exit
• Every participant is a price taker – No participant with market power to set prices
• Perfect factor mobility – In the long run factors of production are perfectly mobile, allowing free long term adjustments to changing market conditions.
• Profit maximization of sellers – Firms sell where the most profit is generated, where marginal costs meet marginal revenue.
• Rational buyers: Buyers make all trades that increase their economic utility and make no trades that do not increase their utility.
• No externalities – Costs or benefits of an activity do not affect third parties. This criteria also excludes any government intervention.
• Zero transaction costs – Buyers and sellers do not incur costs in making an exchange of goods in a perfectly competitive market.
• Non-increasing returns to scale and no network effects – The lack of economies of scale or network effects ensures that there will always be a sufficient number of firms in the industry.
• Anti-competitive regulation - It is assumed that a market of perfect competition shall provide the regulations and protections implicit in the control of and elimination of anti-competitive activity in the market place.

We can argue about this one of these is furthest from being the case in the property market in Argentina, but I don't think anyone would claim that there is good infomation in the market. It's quite hard to even find what is for sale since there is no service that brings all the listings together. Combine that with sale prices are are partially "en negro" and undeclared add-ons and changes to houses and it's hard to see what is being sold and for how much.

 

[London2Baires]

Say there are 2 apartments in the same building, same floor and in more or less the same condition. Vendor 1 wants 250k for theirs yet vendor 2 wants 300k for theirs. What information is there in the public domain to help a buyer decide which is the closer to a fair value? I see so many prices on Argenprop and Zonaprop that vary wildly and seem as if they are plucked out of thin air. I occasionally see these avg price per sq metre graphics in newspapers etc but dont know how reliable they actually are. Surely people dont trust estate agents to guide them on these matters?

I recently went thru this when we moved. The prices are all over and a fair mkt price doesn't seem to exist due to lack of info on comps or recent sales. I understand that until recently, sales were off the books, partly or fully in black, to avoid or reduce tax. So only the parties involved knew the transaction price.
Zonaprop is a good start, you'll start to see some properties averaging close and a few outliers. I feel many list for a dream price and negotiate down. It really depends on the situation of the seller.
We found 2 identical plans in the same building, 1 floor apart, with diff agents. Made offers to both about 10% below their similar asking price. 1 was willing to negotiate and the other no. The 2nd is still for sale 6 months later.

Yep, Zonaprop etc and compare. If not enough for sale, look at rentals and extrapolate as best possible.

Good Luck!

 

[rickulivi]

There is one way to estimate market price. Most building in dense areas of BA are cookie cutters; that is, each apartment in a building has a floor plan very similar to the one above or below it. Often too, most buildings are not that different from each other, which means if one can determine a value per square meter for the neighborhood, this can be used to determine an approximate value to the apartment one is considering. Just multiply the price per square meter times the square meters of the apartment you are considering, and you will get a fairly good estimate. Be careful in separate interior square meters from square meters due to balconies. Price parking totally separate.

 

[retiredbanker]

A property, whether in Argentina or the United States, is worth what someone will pay for it. A property owner can ask any price but without a buyer, it's worth nothing. Asking price in a hot market might be whatever figure the seller asks; in a tepid market or if the owner is in dire need of cash, a low ball bid is often well below market.

 

[rickulivi]

Retired banker: You may be right with your statement, but it does not address the original question, which was "What information is there in the public domain to help a buyer decide which is the closer to a fair value?" Can you answer the question asked?