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 Nación 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 Núñez (+1.2%).  For more information about Buenos Aires real estate opportunities, search our archives and download the July 2010 issue of InvestBA Privada. (Full Story in Spanish).

Local officials anticipate another record year of residential construction in Maldonado, Uruguay

The Uruguayan coastal state of Maldonado—home to popular beach side destinations like Punta del Este and José Ignacio—is poised for another record year of new residential development, according to state development and tourism officials. In an interview with El País, the Director of City Tourism for Maldonado Horacio Díaz says in January and February, developers submitted approval requests for 170,000 m² of new residential construction. At the current rate, Maldonado forecasts 400,000 m² of new projects will be submitted for approval by year-end 2010. If that forecast is valid, the increase in new construction requests would exceed 2009 by 14.2%. In 2009, developers submitted approval request for 350,000 m² of new construction, of which Maldonado approved 290,000 m² or 83%. Contrary to popular belief, most of the new construction requests in 2009 were for single-family homes (63%) vs. multi-unit dwellings (37%), of which only 10-12% were high-rise condominiums. In the same article, El País points to the report we shared last month regarding the dynamic nature of the Maldonado real estate market vis-a-vis Buenos Aires. Over a recent 12-month period, the ratio of total area: $ sales was almost identical for both Buenos Aires (200,000 km² : US$4.26MM ) and Punta del Este (20,000 km² : US$437MM). For more information about Maldonado real estate opportunities, visit our archives our download the July 2010 edition of InvestBA Privada.

View from the pool deck of Maral 52, one of the luxury towers under construction in Mar del Plata.

Yesterday was an historic day here in Buenos Aires. Millions took to the streets to celebrate the 200th anniversary of the Revolution for independence from Spain. Further down the coast in Mar del Plata, festivities were equally raucous; yet, it’s another “200″ that’s generating headlines.  That’s the number of new buildings currently under construction in this seaside metropolis of 550,000 residents, according to Editorial NyP. That ratio of new construction to population may sound out of whack until you consider the population of “Mardel” more than doubles several times during the course of the year as visitors, many from Buenos Aires, pack the local beaches. While the numbers are impressive, the housing boom enthusiasm is tempered by NyP with a closer look at real estate values which are now on par with BA neighborhoods like Palermo and Caballito. Inland real estate values in Mardel are roughly $2,000/m² ($185/SF), while coastal values range from $2,700-4,000/m² ($250-370/SF). General consensus by those interviewed is that prices are inflated and local demand, especially from middle class Argentines who rely on bank financing, may not be adequate to absorb future inventory levels. Some Mardel projects completed during the past two years are still not 100% sold, which may give pause to developers of an additional 200 buildings currently approved. While foreign buyers may choose to steer clear of Mardel condos, the region should not be overlooked entirely. Beautiful beach cottages and country homes in secluded forests are scattered around Mardel and offer excellent value for investors. (Full Story in Spanish)

Despite a sluggish start and less new construction, 2009 finished on a positive note in Buenos Aires.

Argentina’s Reporte Inmobiliario just released the 2009 summary for real estate transactions in the City of Buenos Aires and—despite the fact that activity is at the lowest level in a decade—the overall trend for 2009 is positive. According to RI, “Compared to 2008, the total number of real estate transactions in the City of Buenos Aires (75,950) fell 21.84%, while the total area of housing units under construction declined almost 35%. In the Province of Buenos Aires, the decrease in the number of transactions (105,638) was 25%.” As the adjacent bar graph indicates, BA home buyers really pumped the brakes during the first half of 2009 with monthly sales figures falling on average 30% compared to 2008. If that trend had continued, 2009 real estate transactions in the City would have fallen to around 60,000 compared to the actual figure of 75,950. After eight long months, renewed optimism and market activity finally kicked in around September, and the year ended with the first monthly gain in real estate activity vs. 2008. In terms of units under construction, MercoPress reports “New projects totaled 1.7 million square meters (18.3MM sq. ft.), which means a 34.7% fall compared to 2008. Similarly three neighborhoods concentrate the majority of new projects, with one of them (Palermo) absorbing 11% of the total which is 200,918 square meters (2.16MM sq. ft.).” InvestBA believes the upward trajectory of sales activity will continue in the first-half of 2010 given a favorable supply/demand imbalance, the lingering mistrust of local banks and lack of sound investment alternatives. The second-half of 2010 should be less robust given the shifting landscape and growing uncertainty building up to the pivotal 2011 elections. (Full story)

SMI, the 2009 Real Estate Expo in Argentina, begins next Tuesday in Buenos Aires.

Real estate developers, interested buyers and a Bariloche-sized avalanche of real estate agents all converge on Buenos Aires next week for SMI 2009, one of the largest real estate expos in South America. The third annual edition of SMI will showcase new condominiums, private, gated communities—or “countries” as Argentines call them—and coastal retreats in Argentina and Uruguay’s Tango Coast. And if this Dow Jones report detailing the recent surge in sales activity is any indication, there should be lots of bullish sentiment next week regarding the outlook for the real estate sector in and around Buenos Aires. While sales are down about 18% for the first eight months of the year, new sales activity in August jumped to $490 million, a 46% increase over August 2008 and a 54% jump compared to July 2009. These encouraging sales trends and others are sure to be addressed during the 2009 SMI Speaker’s Conference, “Argentina 2010-2011: The Socio-Political Panorama & the Future of Real Estate.”