After 3 Years of Declines, Buenos Aires Real Estate Sales Rise 11%
By Patrick Archer
Buenos Aires real estate sales reversed three straight years of double-digit declines in 2015, according to new numbers released yesterday from the Buenos Aires Notary College.
Residential real estate sales in the City of Buenos Aires rose 10.91% in 2015 to 37,381 total closings ending three years of falling sales thanks to the USD currency controls imposed by the previous administration in 2011.
2011: The Turning Point
After a slow 2009, Buenos Aires real estate sales began to pick up considerable momentum in 2010 as more local investors sought a safe haven from rising inflation. Total real estate closings in the City of Buenos Aires surged to 62,300 in 2010 and rose another 1.6% to 63,300 for 2011.
While the first nine months of 2011 showed a continuation of the market strength exhibited in 2010, the party was abruptly ended with the “K” re-election and the immediate implementation of currency controls which froze the local property market.
What followed were three straight years of declines in terms of real estate sales, new construction permit applications and widespread layoffs in all sectors of the industry including construction, engineering, sales and marketing.
From the peak of 63,300 in 2011, the number of residential real estate transactions in Buenos Aires plummeted 26% to 46,630 in 2012, nosedived another 23% to 35,906 in 2013, and slipped another 6% to 33,690 in 2014.
2015: Signs of Life
The Buenos Aires real estate postmortem on 2014 included such lowlights as the closure of 800 real estate offices in Capital Federal and the worst year for property closings in three decades.
On the positive side of the ledger, Buenos Aires property values were once again among the cheapest in Latin America. The average price of homes and condominiums in desirable BA barrios were 10% lower than comparable properties in Santiago and Bogota and 50-70% cheaper than similar properties in Rio and São Paulo.
By mid-year 2015, there was cause for optimism with the approaching presidential elections and several signs of real estate recovery. Purchase activity was on the rise, the blue dollar was stable, prices remained firm, and fears of a massive post-election devaluation were diminished.
In the end, total real estate sales in Buenos Aires rose almost 11% in 2015 to 37,381 closings, according to the Notary College (CECF) figures released this week. The total peso-denominated value of all 2015 closings also rose 32% to $40.491 billion.
This week the CECF also released closing data for December 2015 which indicates the number of deals in Buenos Aires rose sharply following the runoff election, while average prices continue to fall compared to previous years.
Total real estate closings for December were up 12.9% compared to December 2014 and 27% compared to November 2015. The total peso-denominated value of December closings rose 40% from the previous month to $6.264 billion pesos. The average value of residential closings was down 7.9% compared to December 2014.
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