Us, UK Housing Crash Effects on BA Real Estate

[Joe]

I was curious to get people's opinions on the effect of the housing crash in the US, UK, Ireland, Spain and elsewhere on the BA real estate (RE) market

First off, I have ZERO experience with the RE market in Argentina, so my speculations are based on my understanding of general macro economic effects on RE markets in general and NOT from personal experience with the BA RE market.

Are expat buyers a force in the Recolta, Palermo and other neighborhoods?
Usually when investors are in trouble they withdraw from foreign markets and retreat into the market they are most familiar and comfortable with.

Are expat buyers selling at an increased pace to raise cash to stay afloat in their home country?

Is the fear of a significant devaluation of the peso a concern?

The Argentina RE market is mostly cash based and should suffer significantly less than other markets which totally debased their lending standards. I also assume Argentines use less credit in general, e.g. car loans, HELOCs, credit cards etc. This should have an ameliorating effect on any housing correction in Argentina.

 

[steveinbsas]

I recently sold my apartment in Recoleta for 10% more than I paid in 2006 and I'm buying another property in Belgrano. I didn't sell to stay afloat in the US as I live here full time. The recent devaluation of the peso didn't make much difference. Over 95% of those who viewed my apartment were Argentine and I accepted an offer 3% less than the asking price. The Argentine buyer of my apartment obviously had dollars (in a dollar account). Of course I am paying for the Belgrano apartment in dollars as well. It was on the market for three days before I saw the ad and I made the offer two days later, I offered 8% less than the asking price and the owner countered with a discount of 3%. It was "priced to sell" in the first place thanks to a divorce being a factor in the sale. Many desirable, well priced apartments in Recoleta, Palermo, and Belgrano have sold in recent months, in spite of the reported slowdown in the BA real estate market. I haven't seen a significant drop from the prices of two years ago, but anyone who bought from late 2007 to mid 2008 might suffer a significant loss if they try to sell now, especially if they paid the "foreigner" price (usually about 15% more than Argentines are willing to pay) and didn't buy in Recoleta, Palermo, or Belgrano.

 

[Recoleta Carolina]

I was curious to get people's opinions on the effect of the housing crash in the US, UK, Ireland, Spain and elsewhere on the BA real estate (RE) market

First off, I have ZERO experience with the RE market in Argentina, so my speculations are based on my understanding of general macro economic effects on RE markets in general and NOT from personal experience with the BA RE market.

Are expat buyers a force in the Recolta, Palermo and other neighborhoods?
Usually when investors are in trouble they withdraw from foreign markets and retreat into the market they are most familiar and comfortable with.

Are expat buyers selling at an increased pace to raise cash to stay afloat in their home country?

Is the fear of a significant devaluation of the peso a concern?

The Argentina RE market is mostly cash based and should suffer significantly less than other markets which totally debased their lending standards. I also assume Argentines use less credit in general, e.g. car loans, HELOCs, credit cards etc. This should have an ameliorating effect on any housing correction in Argentina.

Joe,

Just my opinion here. The real estate market is flooded with foreigner sellers these days. Most of the buyers are now Argentine. It is a buyers market and I expect prices to drop quite a bit over the next year. I only say this because of supply and demand. People from the U.S. seem to be bailing out.

There is an illusion that because people in Argentina pay cash for their apartments that you can never lose your apartment. Not so. If one does not pay their monthly maintenance fee (expensas) the building can take legal action against the owner and ultimately force a sale.