Is BA real estate selling? If so, where and how much?

[7andfive]

I find it some what funny that so many people are posted "not here, of course the Argentinean real estate market is strong". Everyone in every city thought the exact same thing- no market is immune, even Argentina despite is limited exposure. If the majority of people have to borrow some money to buy a property then there's exposure. And the Argentinean wealthy class is exposed because many of them have children studying abroad (which is now costing them more) and have purchased property abroad.

Some of you can keep your head in the sand but higher unemployment, lack of foreign investors will mean a deep drop in real estate prices here.

 

[perry]

I find it some what funny that so many people are posted "not here, of course the Argentinean real estate market is strong". Everyone in every city thought the exact same thing- no market is immune, even Argentina despite is limited exposure. If the majority of people have to borrow some money to buy a property then there's exposure. And the Argentinean wealthy class is exposed because many of them have children studying abroad (which is now costing them more) and have purchased property abroad.

Some of you can keep your head in the sand but higher unemployment, lack of foreign investors will mean a deep drop in real estate prices here.

I dont agree with the comments above.


I suggest that if we look at the crash in 2001 and see that even though the currency was devalued 70 percent in Barrio Norte prices only dropped 25 percent topssss. In 2004 prices exceeded precrisis levels just 2 and a half years after Argentinas worst crash. For peoples information foreigners only make up 12 percent of all real estate sales in the Capital and while significant is not the main driving force of the sales here.

For example many areas of Buenos Aires before the crash were dirt cheap like Palermo Viejo where houses in the 1990s were around US 500 per metre . They reached the stratospeheres after 2002 reaching their peak in Late 2007 to 2008.¨House prices have reached Us 2000 to Us 3000 dollars a metre in the better parts of Palermo .

Will prices go down YES and some areas like Palermo Hollywood, San Telmo and other bubbles more so but not of the levels seen in USA and Europe due to many reasons. Simply put prices are not European or major city prices where US 25000 dollars was common in Moscow in the last years. Prices in Buenos Aires are around US 2000 dollars a metre hardly incredible prices.

If you are buying property for a long term investment Argentina is a safer bet than fiat currencies. Look around but buy with caution as there are good deals for those who are patient.

 

[citygirl]

I dont agree with the comments above.


I suggest that if we look at the crash in 2001 and see that even though the currency was devalued 70 percent in Barrio Norte prices only dropped 25 percent topssss. .

Pericles - were you here in 2001? I'm not being snippy - just asking. Because I wasn't but know a few people and have heard a lot more stories about people selling their properties at a 50-60% loss just to have cash. And I've certainly heard a much higher percentage drop in prices. But again, besides personally knowing 2 people who did, the rest is anecdotal.

FWIW - a good value is always a good value. I think most of the real estate being built here these days isn't a good value. Cheap construction, over-priced and that's why they are sitting on the market. Tourists aren't going to be coming here to "snatch up" anything.

But my guess is that a good, well-built apartment in the "desirable" areas - aka, Las Canitas, Recoleta, Palermo Chico will always hold it's value. You may not make tons of money but you will probably always be able to rent it out and or use it for yourself and not throw money away.

 

[steveinbsas]

I find it some what funny that so many people are posted "not here, of course the Argentinean real estate market is strong". Everyone in every city thought the exact same thing- no market is immune, even Argentina despite is limited exposure. If the majority of people have to borrow some money to buy a property then there's exposure. And the Argentinean wealthy class is exposed because many of them have children studying abroad (which is now costing them more) and have purchased property abroad.

Some of you can keep your head in the sand but higher unemployment, lack of foreign investors will mean a deep drop in real estate prices here.

The sentence "If the majority of people have to borrow some money to buy a property here then there's exposure." is the key to 7andfive's post.

The simple fact is that the majority of people here DO NOT borrow money here to buy property. In fact, given the astronomical interest rates in Argentina, only a very small percentage of Argentines would even consider doing so. There is not going to be a tidal wave of foreclosures here. Foreign investors indeed had some influence on prices in some neighborhoods, but inflation in the past two years has driven up building and materials costs as well.

I would like to see some numbers regarding the "Argentine wealthy class" and how much property they really purchased abroad...and how many of their offspring are attending schools there. Isn't it more common for those with that kind of wealth to buy apartments in Argentina to give to their offspring after they return form getting their education?

As Pericles noted, it is possible to find good values now. I've spent a great deal of time in the past three years studying the BA market. Sales are slower now, but there is clearly no panic selling. The folks with their heads in the sand might be the ones who, while they are waiting for a "deep drop" in BA real estate prices, get caught by a sudden drop in the value of the dollar.

I'd rather be invested in a property I can live in rather than pour my money down the drain of rent for a couple years in hopes of buying at a lower price in the future.

 

[tangobob]

I hold my hands up, I am posting "not here" I have never tried to hide the fact that I must work in the UK to be able to own property in BsAs, but I am one of the growing number of people who own a second home in Argentina.
Since I first entered the roller coaster ride of buying a property, I have seen the value steadily increase, and should the value drop again, it would have to accelerate far beyond the (small) drops we have seen in Europe before I would cease to be in profit.
The property market in the USA (of which I know little) I think has different, and greater problems than elsewhere.
While I agree that when America sneezes the rest of the world catches a cold, the property market is not as fluid as other markets, afterall I cannot buy a place in Buenos Aires and live in it in England.

 

[perry]

Pericles - were you here in 2001? I'm not being snippy - just asking. Because I wasn't but know a few people and have heard a lot more stories about people selling their properties at a 50-60% loss just to have cash. And I've certainly heard a much higher percentage drop in prices. But again, besides personally knowing 2 people who did, the rest is anecdotal.

FWIW - a good value is always a good value. I think most of the real estate being built here these days isn't a good value. Cheap construction, over-priced and that's why they are sitting on the market. Tourists aren't going to be coming here to "snatch up" anything.

But my guess is that a good, well-built apartment in the "desirable" areas - aka, Las Canitas, Recoleta, Palermo Chico will always hold it's value. You may not make tons of money but you will probably always be able to rent it out and or use it for yourself and not throw money away.

Citigirl

In Recoleta and the best parts of Barrio Norte the price drops after the 2001 crash were at best 25 percent. Argentine culture and particularly Buenos Aires does not panic sell and the people who waited recovered all they lost in 2003 only a 2 year period after the great crash. In late 2004 and 2005 prices in the capital federal were at their highest and continued increasing till 2008 .

Yes there will be decrease in prices especially in Palermo Soho, San Telmo and Puerto Madero as they went up too quick . Yes many new developments in the city of Buenos Aires has been shoddy and overpriced . I know many buildings that are over 3000 dollars a metre that are worth at best 2000 dollars. Saying that there are some excellent developers who are ethical and have great projects at reasonable prices. the best one is http://www.ykonos.com.ar/. There new project in Las Canitas are the best priced in Buenos Aires by far . You will be suprised how reasonable per square metre it is Citygirl.

 

[7andfive]

Of course time will tell. I heard the same arguments for the NYC, Hong Kong and Shanghai markets- were most people had a flush of cash and bought mostly without mortgages but still those markets are getting major corrections.

When you have run away inflation and soon to be higher unemployment (which is happening in Argentina now) something has to give. And despite what some are saying on this board, cash is king at the moment- just ask China.
Like I said before time will tell but I just don't see any indicators that now is a even remotely a good time to buy in Argentina.

 

[steveinbsas]

Of course time will tell. I heard the same arguments for the NYC, Hong Kong and Shanghai markets- were most people had a flush of cash and bought mostly without mortgages but still those markets are getting major corrections.

When you have run away inflation and soon to be higher unemployment (which is happening in Argentina now) something has to give. And despite what some are saying on this board, cash is king at the moment- just ask China.
Like I said before time will tell but I just don't see any indicators that now is a even remotely a good time to buy in Argentina.

OK, Stan, er, I mean 7andfive. We'll see.

 

[criswkh]

If cash is king why is gold going up hit at 1,000 today. The dollar and gold don't rise at the same time.

 

[perry]

Will Cash still be king ( american dollar ) if it loses its value due to the mass overprinting atm ?