Real Estate Timing - Arguments For Now Vs Later?

[Jaredberryman]

Really??? I thought prices were going down on the whole. Maybe not in Recoleta, but seems like in most normal neighborhoods, prices have really been going down, 10 to 20 percent. No one can get dollars to buy and no one wants to sell in pesos.

Don't think 2001 will happen again; that was a once in a lifetime deal. Price may stagnate slowly though. Who knows. No one can predict what will happen. They might go up as property is still an investment with returns and will likely be for the short term future. Can't say that for anything else in this country.

 

[mrporoto]

Oh the economics of property!! it goes up it goes down like a pendulum so take your pick.Why do you want to buy you don't like renting?then buy now!!I bought for that reason
then sold when I no longer needed it and the price paid verus the price sold isn't just bought 100k sold 140k so made 40k.Other factors like,savings in rent,comfort of living in your own place,security,inflation,time you want to keep it,how to remove your money from cristinas clutches......etc etc...oh and the usd collapse???Why does everyone think
the only reason to buy a place to live is to make money?buy to rent is different it's a business.

 

[MikeMike]

Real estate speculation in Argentina strikes me as some form of extreme sport. If you're looking to time the market, here, it seems to me like a ~bad idea. The gov't is too unpredictable and is fine w/ implementing measures that seriously negatively impact the real estate market (the cepo, etc). So, I wouldn't buy on the hopes of making gains (it could happen, and would be great, but it is a gamble IMO).

W/ that said, if you plan to spend time in Argentina, and can purchase and hold ~indefinitely, then, it might be the right thing to do. I purchased in 2008, and, I am entirely happy w/ my decision and am much happier having my own place, as compared to renting (i.e. for me, buying was the right decision, and I would do it over again, even w/ today's market conditions).

I would also recommend exploring Uruguay and Chile, if you're not strictly tied to BsAs, as both are lovely places yet much more stable, etc.

 

[Patagone]

Good discussion. One option would be to sell the property you live in and rent for 1-2 years and buy again. That is, if you are sure that:
- Prices in USD will drop
- Inflation will keep on rising, maybe even into hyper mode. This will make an expensive rental house very affordable very quickly.

I wonder if anybody here remembers what happened with the prices of terrain/lotes in 2002 and other interesting times? Here in Patagonia prices of both lotes as well as houses keep on going up. There is much crappy construction going on and some decent construction, but often small places. Would it make sense to buy a lote now and wait 2 years with construction?

 

[Reneige]

It's a difficult question indeed. I cannot claim to know much about the market in Argentina for real estate. I heard that BA home prices have fallen a lot in the last few years, is that true? One consideration I would make is that if the current or next government is keen to fight inflation, they will need to cut the money supply and cut spending, and that would probably result in a recession. Presumably you would have more bargaining power in a recession because the demand for homes will be low, and it is possible for prices to fall. If I were in your position, I would be monitoring home price measures (is there an index of some sort?) and the economic / political situation of the country. I would also keep monitoring the foreign reserves situation and see if they continue to deplete. Right now things could go either way. If the country becomes dollar starved, you will be at a relative advantage having dollar savings. If things turnaround then you may slightly miss a low-point in the market. But frankly, with the amount of certainty in the economy at the moment, I think your best move would be to wait. Even if home prices rise a bit you have not lost a lot, and you could spare yourself some grief if things go ugly. Maybe wait until the next government?

I hope that helps a bit.

 

[Noruega]

Real estate speculation in Argentina strikes me as some form of extreme sport. If you're looking to time the market, here, it seems to me like a ~bad idea. The gov't is too unpredictable and is fine w/ implementing measures that seriously negatively impact the real estate market (the cepo, etc). So, I wouldn't buy on the hopes of making gains (it could happen, and would be great, but it is a gamble IMO).

W/ that said, if you plan to spend time in Argentina, and can purchase and hold ~indefinitely, then, it might be the right thing to do. I purchased in 2008, and, I am entirely happy w/ my decision and am much happier having my own place, as compared to renting (i.e. for me, buying was the right decision, and I would do it over again, even w/ today's market conditions).

I agree with all of this, and I think that buying here is more for consumption than for investment. Rental prices seem low, unless you can tap into the tourist market, and that would not give you income every week or month. I am looking to buy for the reasons Mikemike share: I want to have my own place, some stability, etc. Anything could happen but I am not looking to make money, just find a cute place that I like, where I can invite friends and family and that can serve as my base. I am thinking about renting out a second bedroom when I do buy, but not counting on this income at all.

Great thread by the way!

 

[Davidglen77]

This is my take....I've bought and sold a couple of times here and each time made a decent profit, 15-20% within 2-3 years of the purchase. Not so bad. Prices have gone down in real terms since late 2011 when the dollar clamp was enacted, however, premium properties, have not. The people with access to enough dollars to purchase $200K U$+ properties are a small percentage of Argentines that have their money outside of the country and operate through money brokers. So if you buy a premium property, it most likely will hold and increase its value. Properties for the average Joe, well those may not increase at all, and may slightly decrease. Remember the property market in this country is small comparatively, this country has a total of 40 million people and an economy smaller than the entire state of California. If you are buying a property for investment, hoping to make a profit then make sure you buy an easily marketable property that stands out from others in some way or another. If you buy a 1 bedroom apartment, in a building with no elevator with a brick wall view, well then good luck. Make sure that you either buy something with 2 bathrooms, or a nice terrace or a parking space or high ceilings....etc.

 

[Matiasba]

If you buy a 1 bedroom apartment, in a building with no elevator with a brick wall view, well then good luck. Make sure that you either buy something with 2 bathrooms, or a nice terrace or a parking space or high ceilings....etc.

I bought a 1 bedroom apartment in a building with no elevator in 2011 and its value grew more than 30%.

http://baexpats.org/topic/27902-apartment-for-rent-in-recoleta/

 

[Dublin2BuenosAires]

I bought a 1 bedroom apartment in a building with no elevator in 2011 and its value grew more than 30%.

http://baexpats.org/...nt-in-recoleta/

That's Ok if it can be sold in dollars, if can only be sold in pesos then you lost money as 30% is below the value of inflation over the last 3 years.

If it grew 30% in dollars, and can be sold in dollars then you're ok.

 

[Matiasba]

That's Ok if it can be sold in dollars, if can only be sold in pesos then you lost money as 30% is below the value of inflation over the last 3 years.

If it grew 30% in dollars, and can be sold in dollars then you're ok.

From what I know, transactions in a high percent are still made in dollars. Thats how we sold and bought two properties in 2011 and 2012 with the cepo.