Latin America: Argentina - Worth a Gamble?

Posted by Jude Buttle on Tuesday, September 30, 2008

In our fourth instalment on Latin America, we assess the country where the tango was born and passions run high... Argentina.

Country Overview

Argentina sits in the southern part of South America and is the second largest country on the continent, after Brazil.

In January 2002, the Argentine currency was disassociated from the US dollar, allowing the peso to fall freely. The country suffered a brief period of social chaos, poverty and an inflation rate of 26 per cent.

Since then, Argentina has been cleaning up its act and is now one of the fastest growing countries in Latin America and its GDP continues to rise. It registered an estimated GDP per capita growth of 40.6 per cent from 2002 to 2007. This in turn encouraged the real estate market, which is rapidly rising, mainly due to a number of foreign investments.

There are no restrictions on foreigners who wish to purchase property in Argentina. They only need to obtain a CDI (tax ID) number from the government to be able to invest.

The result of the economy's expansion has been a strong increase in the demand for residential property and the average price of apartments in the capital city of Buenos Aires rose 13 per cent in 2007, according to economic and real estate newspaper Reporte Inmobiliario, which maintains a database of Buenos Aires residential property prices.

Residential rents have been rising even faster than residential prices in Buenos Aires, according to officially-published CPI data. The rental values are expected to continue moving upwards, partly because it is extremely difficult for people on a middle income to get mortgage finance for their first home.

Last year also saw a number of new constructions and rapidly rising building costs, as the price of land increased dramatically. Higher costs are pushing developers to build smaller units, with the fastest growth at the lower end of the market.

2008 is expected to see some slowdown in the market with the introduction of a policy stipulating that new housing projects must apply for a feasibility study. New developments have also met resistance in some up-market areas, magnifying the reasons to build in poorer neighbourhoods.

Since the calamities of 2002, Argentina's property market is currently flourishing and investors are snapping up bargains. Although there is definitely good investment potential, due diligence is required as Argentina's international real estate market is still in its infancy.

Property Info

Entry level - An off-plan development that offers an excellent opportunity to invest in an apartment in central Buenos Aires. There is a five year guaranteed rental of 10% per annum, but for those investors wanting to take advantage of rising capital appreciation, there is an option to sell their apartment prior to completion. Price for the studio flat is £29,870.

Mainstream - An exquisitely appointed three bed townhouse opposite a lovely park in San Rafael's most exclusive area. With large windows, beautiful tiles and La Pacho wood, the house is tastefully designed and also has an enclosed and spacious garden. Price £214,600.

Top of the range - Two stunning houses set in their own grounds with electric gates, swimming pool and tennis court, in the picturesque Mendoza region. The main house entrance is through large wooden double doors into a beautiful reception area complete with small bar. Walking past the grand piano brings you into a tiled living/dining area with glass doors looking out towards the swimming pool. Price £325,650.

Search for property in Argentina

If you are looking for property in Argentina for sale such as villas, apartments or other types of real estate, why not check out TheMoveChannel.com Argentina, which has a large number of listings from Argentine estate agents and developers selling properties in the area: http://argentina.themovechannel.com/

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Latin America: Argentina - Worth a Gamble?

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