When will property be cheap in Buenos Aires?

[perry]

Argentina is a completely speculative real estate market with no fixed pricing for property that can determine its real value . There is no

Are prices overvalued in Buenos Aires? Short answer: perhaps, but not that much. Long answer: below is why.

Residential real estate prices are mainly affected by three variables: location, price and terms. Looking at prices in BA now, we can ignore the location part because that's very specific to where the unit is located. Lets analyse then price and terms. If you offer me very good terms, I don't mind paying more than market value. For example, suppose your want to sell me a property at 20% over market, but you offer me 40 years to pay it off and at a low interest rate. The terms maybe very appealing, so I will not mind paying the premium. However, if you offer no terms but want to be paid all cash, then I will expect a lower price. Cash is king: he who has the gold makes the rules (or something similar).

in BA, terms are all cash, so really there are no terms. Therefore, you can expect that in general, market prices tend to reflect the lack of terms, therefore, prices are at equilibrium or as low as you can expect. Thus, it is unlikely that if you wait, you'll get a huge discount.

If you are planning to flip a property, that is, buy cheap and sell high in two or three years, forget it. Sales commissions and other transaction costs are very high in BA, so that reduces the incentive to buy and sell and make a profit.

Who should buy? Only those with a long term perspective.

What does the current market offer, that it did not a year ago?Or, why is it attractive to buy today rather than last year? Large supply, which means you might be able to find exactly what you are looking for. Other times, inventory was low, so you might get stuck buying something you really did not love.

In sum, if you have a long term perspective, don't let the naysayers discourage you. Spend time looking, find a great property, and buy it. Don't worry about the price.

Prices of real estate are affected by supply and demand and currently there is a larger supply of apartments for sale than ever before in Buenos Aires history . Zonaprop the largest portal for real estate sales has 75,633 properties for sale in Capital Federal . In the month of January there were only 2000 deeds done in Buenos Aires meaning that with available supply of apartments only 4% of available products are selling per month and each month the supply gets larger and larger . This is a very telling statistic and clearly shows the direction of the real estate market . Imagine now if the peronists win and the peso reaches 80 per dollar how much will your property in US dollars be worth ? This is the reality that we must face as sellers .

 

[Joglide]

If you had rented an apartment of US$600 per month, for 30 months (10 years) would total US$18000 . Where is the savings? You perhaps stand to lose more than that when you sell? with considerable headaches for 10 years?

Is 30 months 10 years or 2.5 years? I make $600 x 12 x 10 = USD$72,000?

 

[tangobob]

Is 30 months 10 years or 2.5 years? I make $600 x 12 x 10 = USD$72,000?

I think he was working on my being here 3 months of the year.

 

[sergio]

The real estate market seems overvalued to me. Argentines tend to think their property values are greater than reality and will often refuse to sell until they get an inflated price. During the last huge crisis sellers stated to drop prices because they saw no way out. This time many may think that Macri is on their side and will eventually straighten things out but I think that will be hard and the extreme indebtedness he has taken on will not help.

 

[tangobob]

Argentina is a completely speculative real estate market with no fixed pricing for property that can determine its real value . There is no



Prices of real estate are affected by supply and demand and currently there is a larger supply of apartments for sale than ever before in Buenos Aires history . Zonaprop the largest portal for real estate sales has 75,633 properties for sale in Capital Federal . In the month of January there were only 2000 deeds done in Buenos Aires meaning that with available supply of apartments only 4% of available products are selling per month and each month the supply gets larger and larger . This is a very telling statistic and clearly shows the direction of the real estate market . Imagine now if the peronists win and the peso reaches 80 per dollar how much will your property in US dollars be worth ? This is the reality that we must face as sellers .

You are the guy that knows Perry, but I can't help but wonder at all the constructors. Surely they expect to sell? Many have held on to plots since 2001 and are now building. There are three vacant plots on my block alone now being built on. I would be interested in your take on this.

 

[Rich One]

I think he was working on my being here 3 months of the year.

That is Correct You said you spend ONLY 3 months for 10 years???

 

[Rich One]

Is 30 months 10 years or 2.5 years? I make $600 x 12 x 10 = USD$72,000?

Seems Wrong criteria??

 

[perry]

Property Prices are collapsing in many markets worldwide . Sydney and Melbourne Australia had the largest drop for 35 years in 2018 with a 10% drop in price . I believe that the Australian property market was the biggest bubble real estate has ever seen with inflated prices created by easy credit . lax investment laws , and unregulated foreign investment laws . In Sydney prices went up to the stratosphere with a average price for an apartment of over 600 thousand us dollars and free standing properties close to 1 million .

Sydney and Melbourne will drop 50% in the next three years in us dollars as when a bubble is formed from pure speculation the bigger the drop when laws are changed that grossly favoured the wealthy investor leaving the first time home buyer paying the cost

https://www.finder.com.au/property-bubble

 

[Joglide]

Seems Wrong criteria??

Yes we were talking about two different people: one tango aficionado here who has bought and spends 3 months per year here and another (my friend) who is renting and spends 12 months a year here - both tangueros. I assumed (wrongly) we were talking about full year rentals.

 

[steveinbsas]

There is a wealth tax of 1% PA, not applicable if you have less than $250,000 and DNI. No DNI you pay on everything.

If you are referring to the bienes personales tax, the last info I had was that the rate varies from .5% to 1.25% depending on the value of your assets (real estate and cars).

Could you please clarify the $250,000 figure? Is is British pounds or US dollars calculated at today's rates?

When I arrived in 2006 the "exemption" (at least for residents with a DNI) for the tax was just over $100,000 pesos.

That was increased in 2009 to about $300,000 pesos.

By 2018 the exemption was increase to just over $1,000,000 pesos.

I don't know what it is this year. Its probably on the APIF website.

Non-residents (no DNI) may pay "on everything" (from zero), but only on the value of their assets in Argentina.

I'm not sure if those assets are subject to a flat rate of 1% or fall into the progressive categories.

Temporary residents may be eligible for the exemption, but only on their assets in Argentina.

Permanent residents are (supposedly) subject to this tax on their world wide assets.

I daresay, that's a good reason for a wealthy foreigner (individual or couple) not to get permanent residency.

Unfortunately, (last I heard) migraciones requires temporary residents to become permanent residents at the fourth renewal.

That would cost a wealthy foreign couple a ton of money if they want to live in Argentina more than six months of the year...a lot more than paying the tax (from zero) on everything they own in Argentina if they don't have permanent residency.

That brings up the question. "How would AFIP ever know what assets (real estate and cars) they had in their home country?

I'm not sure how AFIP could ever find out...unless they have a "whistle blower" program and the rich foreigners tick someone off enough to drop a dime on them.

When you come to sell they will assume that when you were not here, you rented and tax you accordingly.

I think it may be possible to avoid taxation of "assumed rents" if you can provide utility bills that show the monthly electricity and gas consumption was near zero while you were not in Argentina, but this process can delay the sale by weeks (if not months).