Is this the right time to buy a property in Argentina?

[davonz]

Who will ever know when it is a right time to buy property here - it seems everyone says something different and there isnt any real gov stats.

I got a ride home from hurlingham with a realestate agent a while back, and she was telling me that she hadn't had any sales in recent months, that people were not buying, were very cautious, and maybe waiting to see what happens after the elections. Her clients were the richer end of the market so maybe they are different from the average joe. Maybe they have more options for investment, or can move money out of/into arg easier.
Then you get people like Perry who say its going alone ok/great, and prices are going up.
Then there is my own experience - the last apartment i lived in at the end of last year, on billinghurst in Palermo, was on the market for at least 8 months (while i was renting it anyways) and no lookers, except a few realestate agents coming around to check it out for listing. It was only a couple of years old, in good condition, in a good area, and close to supermarkets etc. And i didnt think the price was to high/expensive, however the realestate agents appraisal price were not as high as the owner expected.
And a friend who's dad died - they have been trying to sell that apartment for a year, not even lots of lookers. Again in a good area, close to shops etc.

 

[windy]

I think prices here are now high but i don't see a bubble as it is not mortgaged backed as it was in the US or Europe. Property here is paid for in full and with so many people buying just to dollarize there assets and protect them from inflation there is still no shortage of buyers. But i think the bombed out markets of the US are now presenting good value as is Ireland and probably Greece Spain and Portugal.
Buy at the bottom of a market rather than near the top.

 

[mariano-BCN]

yeps, i know that, "buy at the bottom", but when is the bottom? I have the impression prices won't fall as easy as they went up

 

[dr__dawggy]

I think Perry's point was that in every market there are "bargains" to be found....The price he quoted--$2,500 per square meter--for a well maintained property with lots of light situated in a desirable part of Palermo or Recoleta is certainly not overpriced and not that much more than prices from 2003-4.

On the other hand, I see lots of properties advertised for around 4k per square meter in these areas....easily double the prices of a few years ago....I would not buy a property priced at such a premium....

No, Argentina does not have US style real estate bubble but prices are affected by speculators looking for a dollar denominated investment....and with or without financing, prices have fluctuated in Buenos Aires, with ups and downs coming around every 7-10 years.

 

[fifs2]

yeps, i know that, "buy at the bottom", but when is the bottom? I have the impression prices won't fall as easy as they went up

Mariano, I think that's a fair point as I don't see Bsas property having hit its peak yet possibly having any reason to sink as fast as in 2001. I bought a property in 1995, early bubble in Ireland when noone foresaw the 17+ boom years ahead and in fact many people still waited to buy presuming prices would go down..which they have now of course but let me tell you even with Ireland's economic siutuation in the toilet as it is, house prices have not sunk to pre 1994 levels..well not good ones at least. At one point we considered trading up to a larger property in Dublin in 2000 and we saw derelict properties close to crack dens in outer Dublin for sale at 600k Euro at the time. Those properties you cannot give away in Ireland these days but the house we sold is for sale again at a slightly lower value than when we sold it during the property peak, lower but not at all bottomed out.

We also bought in Bsas in 2002 when prices were super low and great bargains were to be had that you could not found in any other major city in the world. It was such a bargain my husband bought it without me even seeing it. After the crack dens, anything with a roof was a palace..

At the risk of stating the obvious the key is to buy a good asset that has value in any market ie a solid build, interesting features, good distribution of sq metres, good local access to schools, shops etc...the ten a penny, rabbit hutch appartments in which you can hear your neighbours peeing are the types of properties that fall fast and quickly even if they're situated 2 metres from the Google offices!

The story continues and now I'm in Spain house hunting as we speak in a small town near Sevilla where the locals refuse to accept their property values have fallen and we are yet again seeing houses in appalling conditions for sale at 750k euros plus...the difference is we will wait for the bottom, which seems not yet to have trickled down and negotiate hard but we will still pay a lot because we know we will have a solid property that will sell in any market.

You state you have time..enjoy the process of searching in the market and see if anything takes your eye. Money isnt everything and chemistry (to me at leasT) matters as much in houses as in men!

 

[rrptownley]

Prices shouldn't dip; there isn't a bubble model here. Politically the country is stable (election result a foregone). Agricultural exports are as strong as ever with world food prices at a high, the Soy boom here has bought a period of prosperity. Inflation is high and the government is selling alot of their dollar reserves to keep the peso stable, which when they decide to stop doing so could create a sudden slip in value. Real estate here is all done in dollars though.

The market here is quite unique, all residential property is bought and paid for in dollars cash with many homeowners owing more than one property. All that money you have in savings, trusts, bonds, portfolios- the Argentines have in bricks.

This gives solid ownership, a big pool of domestic investment and a big pool of tenants.

It's true that foreign investment has gone quiet due to the Euro zone problems. Domestic purchases are as strong as ever with people buying many single bedroom properties, either investment off-plan units or well located apartment for their children at university or just to rent out.

Good advice from others above. Take your time and get a feel for the prices and attitudes here. There is very little data available on property here. Unlike Australia or the US where you can google or pay for reams of data on real estate. You can't open up a list and compare. You have to investigate it yourself. Real estate agents generally operate differently also.

Location is incredibly important. I have had friends here who have had amazing properties on the market for years because they live just outside trendy zones. Also the quality of property too. Buy good, solid property in good buildings. Investing in off-plan apartments is all good if you intend to flip them quickly, but if you are buying a home choose carefully something that will have re-sale appeal in a few years time. After seeing a few places here you will soon realise that much of the construction is below-par, so hold out for something good.
And when something that is suitable does pop-up, it will disappear very quickly so be vigilant.

You are not going to make a killing with prices here (like post-2001) but the market is strong and you will see return on a good investment. The Argentine real estate market is like a big public bank where you change your savings into bricks so that government, or anybody else, cant take them away from you.

Nb. There is no restriction on foreign ownership of residential property.

 

[French jurist]

Is there also a tax for buying a house like we have here in Holland?

Good question : in the province of Buenos Aires such "sellados" are required for rentals and sales also I believe (2.2% for each of the buyer of the seller? Is that correct?).

In Capital Federal, I know for sure there are no sellados on rentals (in the province yes, well, supposedely) so that must be the same for transfers of ownership (very low sellado maybe?).

 

[jb5]

There is certainly declining interest on the part of Americans and Europeans for many reasons, not just the recessions in those places.

Argentina is lagging behind Brazil and Chile in stability, and multinationals are choosing those countries as a base. Inflation is preventing new investment and forcing those who've invested here is many sectors to leave. Corporate taxes and employment policies keep foreigners from investing as well.

Commodity prices are what's fueling the boom, to bet on investment in Argentine real estate you need to believe they will stay sky high. You also have to believe locals will continue to have lots of US dollars when the inevitable devaluation of the peso happens after the election.

Personally, I'd wait. The only thing that's certain in Argentina is the cyclical busts.

 

[Tourist2008]

I agree with arlean, renting is much cheaper here than you would expect. Reckon on about 4-5% of the purchase price. So a $200k apartment will cost you $8000-10,000 per year. Using $2,500 per sqm purchase price (which is about right for the top districts) that gets you 80sqm.

You say you are half argentine, but do you have Argentine residence or a passport? If not, renting is a smoother option as getting money in and (especially) out of the country again if/when you decide to sell will be a hassle and with lots of paperwork and delays.

 

[Matt84]

Good advice from others above. Take your time and get a feel for the prices and attitudes here. There is very little data available on property here. Unlike Australia or the US where you can google or pay for reams of data on real estate. You can't open up a list and compare. You have to investigate it yourself. Real estate agents generally operate differently also.

Why isn't there an MLS in this part of the world? Other than "SOM" of course which is not a real MLS.

Rather, what do you think would be the greatest obstacles for such a system? here , in Uruguay and Chile?