The two-year plus attempt to convince Buenos Aires real estate buyers and sellers to broker deals in pesos was an epic fail judging by the number of Capital Federal properties listed today in pesos versus dollars.
The Pesofication Of the Real Estate Market Failed is the headline of Alfredo Sainz’ analysis in La Nacion which traces the origin of the 100% en pesos push back to October 2011 when Argentina tightened foreign exchange controls to stem capital flight.
When the currency controls were first implemented only 1% of all real estate classifieds in Buenos Aires were listed in pesos. Just one year later, 20% of Buenos Aires properties were being offered in pesos, but that was the beginning of the end of the movement. 2013 saw a huge shift back to a greenback mentality thanks in part to the short-lived CEDIN plan, and the number of peso-denominated listings continues to fall this year.
Today only 9% of all Buenos Aires real estate classifieds are listed in pesos, and 97% of those are new construction (A Estrenar) listings or residential lots in new developments. Of the 9% of properties currently listed in pesos, only 3% are existing homes and condominiums. In other words, developers whose costs are based in pesos are more willing to accept pesos. Existing property owners who purchased their properties in dollars are not.
While pesos are shunned in the Buenos Aires For Sale market, they are the common currency in the rental market. In fact, the number of Buenos Aires rental properties listed in pesos has never dropped below 95%, according to Sainz. (Full Story in Spanish)
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