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Buenos Aires Mortgage Scarcity = Higher Rents in 2011

On January 31, 2011, In real estate, by InvestBA
For Rent in Buenos Aires

Middle Class Housing: A presidential candidate should seize on this issue with meaningful reform in 2011.

Good news for investment property owners and, depending on the neighborhood, potentially bad news for renters in Buenos Aires, according to a 2011 forecast released today by the Buenos Aires Real Estate Chamber. “In 2011, average housing rents will rise between 15 and 25 percent, a percentage similar to what we’ve seen in recent years. Rents are rising, because the demand for rental properties is not slowing down,” says the Chamber’s Nestor Walenten.

Unwavering demand continues to be fueled by the total lack of affordable mortgage loans in Buenos Aires and Argentina in general, although discussions in recent months have centered on creative solutions like the Association of Housing Professionals’ (AEV in Spanish) proposal. “Current mortgage rates aren’t doing anything to solve the housing shortage that our citizens are suffering,” sais Walenten adding, “Interest rates have to come down, because the current rates are simply not accessible.”

The BA Chamber estimates a housing shortage of approximately 2.5 million units in Argentina, of which 40% or 1 million homes and apartments are needed in Capital Federal and Buenos Aires Province. Builders would have ample incentive to meet that demand if they knew mortgage rates could be slashed, and a large slice of the current renter pie would be turned into potential buyers overnight. If the Association of Housing Professionals mortgage plan were enacted, analysts believe the pool of potential buyer households would explode from roughly 140,000 to over 1.2 million.  (Full Story in Spanish)

For more information about investment opportunities in Argentina, download the new issue of InvestBA Privada.

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Buenos Aires Real Estate Sales Continue Rising Rhythm

On September 15, 2010, In foreign investment, real estate, by InvestBA
Pinares Bosque Privado

Roads are being paved and neighborhoods are taking shape in BA gated communities like Pinares

The sale of new and existing properties continues its upward trajectory in the City of Buenos Aires after a lethargic 2009. The market recovery that began last December has gained momentum during the course of 2010 as we reported in May.

Now the latest statistics from the BA Notary College show a 31.3% gain in real estate transactions closed in July 2010 compared to July 2009, as inflation fears continue to provide ample incentive for a “refugio de valor.” The total dollar amount of July’s 5,535 closings jumped 68% compared to July 2009, while the average value of properties sold rose 28%.

ElArgentino.com says the greatest demand was for properties priced in the US$63,000-US$228,000 range, followed by properties priced above US$228,000. While July’s 5,535 closings were a significant YOY improvement, the number represented a 1.4% decrease compared to June 2010.

There’s a similar story in the Province of Buenos Aires where the 10,730 July closings represent a 70% gain over July 2009. The president of the Provincial Notary College describes the data as proof that “real estate continues to be a good investment.” The broader, more sobering analysis this morning from Bloomberg underscores inflationary fears are fueling current Argentina consumer demand for housing and autos. (ElArgentino.com Story in Spanish)

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

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Uruguay Embraces Pro-Construction Policies

On July 30, 2010, In foreign investment, real estate, tourism, uruguay, by InvestBA
Mujica Astori

President Mujica and VP Astori want to encourage more foreign developers to launch projects in Uruguay.

After the U.S.’s $787 billion Grow Government package which Harvard essentially labeled a failure, it’s refreshing to hear about a stimulus package that could actually create jobs, promote development and provide some much needed housing.

Montevideo’s LR21 reports today on the Uruguay government’s decision to promote a series of fiscal stimulus measures to incentivize private investment in the construction of new homes and condominiums. The President and Vice President of the Republic, Jose Mujica y Danilo Astori, made the announcement yesterday at a luncheon hosted by the APPCU, the Association of Private Developers in Uruguay.

While some members of the U.S. Congress seem completely out of touch with the private sector, President Mujica said he values interaction with groups like APPCU to better understand the needs and challenges facing leaders in the country’s most important job creating sectors. Vice President Astori also acknowledged the critical role national and foreign developers will play in realizing one of the priorities of the Mujica administration, “promoting tourism-related real estate development which provides tremendous revenue and job creation for Uruguay.”

And while national builders still account for the bulk of new construction, Astori officially rolled out the light blue carpet for foreign developers. “These incentives are as much for national investors as they are for foreign groups who can collaborate with the public sector in developing new projects,” Astori said adding, “National investors dominate housing construction, while in the real estate tourism sector, we are hoping for more foreign investment.” (Full Story in Spanish)

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Estabilidad: Buenos Aires Construction Activity Rises 10%

On July 20, 2010, In foreign investment, real estate, by InvestBA
BA Construction

Who needs a boom? "Estabilidad" suits builders and buyers in the Buenos Aires real estate market just fine.

Recent headlines regarding Buenos Aires real estate sales activity have been improving steadily this year, and La Nacion says builders are starting to feel equally optimistic.

During the first five months of 2010, the construction industry posted a 10% increase in new projects under development, while the sale of condominiums and single-family homes advanced 7.1%, according to the Universidad Argentina de la Empresa (UADE).

The UADE’s prestigious Economics Institute compiled the data and forecast “stability” across-the-board for real estate sales, median prices and inventory of rental units. The analysis of all construction segments found the largest January-May increases in three sectors: oil and gas construction (+41%), road construction (+10.4%), and housing construction (+9%).

The UADE study offers a detailed analysis of the local real estate market where new housing inventory grew 7.1% in Capital Federal and Greater Buenos Aires. The rise in inventory was accompanied by an increase in median prices, especially in the Northern Corridor of Buenos Aires, where new condominium prices gained 9.7% in U.S. dollars compared to the same five-month period in 2009.

Median prices of existing inventory in BA posted a 9.3% gain. The greatest increase took place in the Recoleta neighborhood where the average price per square meter for new construction units rose 11.2%. Other BA barrios popular with foreign buyers posted more modest annual price increases including Palermo (+1.5%), Belgrano (+1.2%) and Nunez (+1.2%).

For more information about Buenos Aires real estate opportunities, download IncomeBA and the new issue of InvestBA Privada.

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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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