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Recuperacion: Buenos Aires Real Estate Showing Strength

On July 13, 2010, In foreign investment, real estate, by InvestBA
Puerto Madero Construction

Back from the depths of 2009, BA's real estate sector posted a 41% gain in transactions in May.

A story we’ve monitored closely since the end of last year is the recovery of the BA real estate sector. After an abysmal 2009, December finally offered a positive note; a trend that continued during the first four months of this year.

Now the newly-released housing data for May suggest BA’s property rebound is in full swing. According to the BA Notary Association, the sale of properties jumped 41% in May compared to a year ago, while the value of all real estate transactions rose 91%.

Cronista says the second statistic reflects the large number of buyers taking delivery of high-end units that have been under construction for the last 2-3 years. The 5,165 real estate transactions in May were valued at 1.908 billion pesos argentinos or US$484.82 million.

While local analysts say signs of a recovery abound, it’s worth remembering the year-over-year basis of comparison: the first six months of 2009 was one of the worst periods for BA real estate. As the global financial crisis gathered steam, confidence was shattered and buyers were scarce in the Southern Cone. Now a year later, a rare global commodity has returned to Argentina and Uruguay: optimism.

The May housing numbers show units priced between US$60,000 and US$220,000 accounted for 38% of all sales, while units priced below $60,000 represented 56% of all transactions. The sale of units priced above US$220,000 doubled from 3% last May to 6% in May 2010. (Full Story in Spanish)

For more information about Buenos Aires investment opportunities, download Income BA and the new issue of InvestBA Privada.

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The Argentine Economy Recovers Strength

On June 28, 2010, In a-bric, competitiveness, foreign investment, by InvestBA
Argentina Real GDP Growth graph in Wells Fargo Report

With private expenditure and GDP growth, Wells Fargo sees signs of a recovery in Argentina.

The buzz about Argentina seems to be having an impact on investors of all stripes. After Sunday’s 3-1 defeat of Mexico, global betting sources say the Albiceleste’s odds of winning the World Cup improved to 15/4, third only to Spain and Brazil. Whether sports gambling qualifies as “investing” is certainly open to debate; however, a more sober cadre of long-term investors are also starting to take note.

San Francisco-based financial giant Wells Fargo featured an unlikely subject for this week’s front-page Economic & Financial Commentary: Argentina. The analysis showed Argentina’s 7.9% growth rate in the 4th quarter of 2009 followed by a healthy 6.8% year-over-year rate in 1Q10.

Meanwhile, Argentine private consumption expenditures which rose a mere 0.5% in 2009, grew 7.3% in the first quarter of this year alone. The nation’s spending recovery is also reflected in the current trade balance, as imported goods and services jumped 30% in the first quarter. Unfortunately, exported goods and services only rose 4%, although Wells Fargo notes the strength of the Brazilian economy as a contributing factor in Argentina’s recovery.

While over-dependence on Brazil’s fortunes is a concern, the ongoing China soy conflict highlights the need for 1.) less federal government intervention and 2.) cultivation of more international trade relationships in the Americas, the Euro-zone and Asia. To read the full Wells Fargo Securities report, click here.

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Bienvenidos A Bordo: 2010 Market Predictions for Argentina

On January 5, 2010, In foreign investment, uruguay, by InvestBA
Aerolineas Argentinas flight crew

Market Predictions, Anyone? We could all use some "Comfort y Musica para Volar" this year.

Latin America is a region of the globe where pessimism springs eternal when it comes time for annual economic forecasts.

From a BA perspective, it’s a little like making a reservation with Aerolineas, the state-owned airline: You know you will eventually reach your destination, but you’re just not exactly sure how or when.

Similarly, economists and regional analysts know Latin American countries will make it to the end of the year, but bearish forecasts are the norm given the abundancia of unknown macro and political variables. The Wall Street Journal’s Nicholas Casey says 2009 was no exception, “Investors began 2009 bracing for more drops in Latin American stocks as global markets plummeted in the worst economic crisis in generations.”

Now fast forward to December 31, 2009, and see how bracing and fence-sitting worked out for regional investors: Argentina’s Merval Index surged 115%, Brazil’s Bovespa rose 83% and Mexico’s IPC rallied a respectable 43%. With such “heady gains,” we should hit our knees praying for another round of dire predictions; yet, Casey warns us, “Forecasts are now for an optimistic 4% economic growth for Latin America given its performance in the past year.”

For now, we’ll just have to sit back, relax and see if 2010 is ultimately defined more by unexpected turbulence or friendly skies. Bienvenidos A Bordo.

For more information about Buenos Aires investment opportunities, download the new issue of InvestBA Privada.

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