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Copa del Condo: Buenos Aires Real Estate vs. Punta del Este

On June 23, 2010, In foreign investment, real estate, uruguay, by InvestBA
Buenos Aires v. Punta del Este

Buenos Aires may have 300x more residents, but thousands of them own homes in Punta del Este.

The first round of the Copa del Mundo is over for local favorites Argentina and Uruguay, and both teams are safely through: Uruguay will face South Korea on Saturday, and Argentina will face Mexico on Sunday. Unfortunately, the only way the two teams would face each other would be in the World Cup final which seems highly unlikely.

So today Reporte Inmobiliario (RI) offers the next best thing: the Copa del Condo with Argentina’s capital city squaring off against Uruguay’s most popular beach resort. The Argentine journal sizes up Punta del Este in terms of total foreign investment, as well as its similarities and differences with Buenos Aires.

The Punta del Estate Real Estate Association says $934 million in transactions took place between March 2009 and February 2010. The majority of the deals were done in Punta del Este ($437M or 48%) followed by Maldonado ($175M or 19%), the Rural Zone ($128M or 13%), and La Barra ($45M or 5%). Over the same 12-month period, over $4.2 billion in deals were done in Buenos Aires or 4.5x as many as PdE, which shows how dynamic Punta’s market is when you consider BA has 300x the population.

Not surprisingly, the summer months (Dec.-Feb.) are the months when most deals are done in Punta del Este. In closing, RI says recent high profile lot acquisitions by U.S. investors will be one of the topics discussed at their July Conference. (Full article in Spanish)

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SIMA 2010: The Party’s Over for Spain

On May 24, 2010, In foreign investment, lifestyle, real estate, by InvestBA
SIMA 2010

The Bull Also Rises: Argentine developers avoided SIMA like the plague this year. Ole!

Saturday’s throat goring of a bullfighter in Madrid was more than a victory for animal lovers, it was a fitting sports analogy for the state of the Spanish economy. High unemployment, a housing collapse and a tumbling Euro have many analysts referring to Spain in the same breath with Portugal, Italy and Greece, or our new favorite acronym for European countries drowning in sovereign debt, the PIGS.

Another Spanish acronym, SIMA, used to symbolize the glitz and glamor of the luxury real estate market in Spain. Hundreds of developers and thousands of buyers would descend upon Madrid each May in a second-home orgy of overpriced properties, over-eager agents and over-leveraged buyers. And while there was always a large delegation of Argentine developers at SIMA in years past, Reporte Inmobiliario says this year you can count them on one hand.

The story notes that the term “real estate bubble” was frowned upon a couple of years ago in Spain (As in, “If you don’t say it, maybe it will never happen.”), but now it’s part of the daily vernacular, Spanish developers are being squeezed by their lenders, and the speculative throng that once roamed the halls of SIMA signing multiple contracts for overseas condos has been reduced to a few bargain hunters.

Apparently the Argentine developers could see the writing on the wall and cancelled their Madrid reservations well in advance of this year’s Expo. Brazilian developers were also a no-show at this year’s SIMA, says RI, but for some strange reason the Uruguayan government chose to erect a huge booth. It’s the empty one on the attached article. (Full Story in Spanish)

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

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Buenos Aires Real Estate Survey: Line Up The Usual Suspects

On May 4, 2010, In foreign investment, real estate, by InvestBA
usual-suspects

Recoleta, Palermo and Belgrano remain the Top 3 BA neighborhoods in terms of median price/SF.

A new survey of 465 players in the Buenos Aires real estate sector sheds new light on the market’s strengths, weaknesses and median price levels by neighborhood. LaNacion shares the results of the “Real Estate Scene 2010″ survey led by Mercado and Reporte Inmobiliario.

There was general consensus among the respondents that prices are relatively high in BA, and 57% believe prices will continue to rise during the course of 2010. 30% feel prices will stay flat, while 13% think prices could actually fall over the next eight months. Even greater than rising prices, 60% of those surveyed feel the biggest obstacle to home ownership for buyers in BA is, what else, the lack of financing.

The affordability outlook is similar for renters, as 64% of those surveyed believe rents will increase this year and 24% predicting the average rent increase will be greater than 10%. Despite the obstacles, the majority of respondents are bullish on the sector’s overall outlook including the prospects that new residential projects will be introduced over the next 12 months.

The general mistrust of banks means real estate is still viewed as a tangible, safe harbor asset class for buyers, while the scarcity of mortgages ensures a steady stream of future renters for those looking for investment properties in BA. In terms of median prices by neighborhood, the usual suspects remain the most expensive and desirable destinations: Recoleta, Palermo and Belgrano. Villa Devoto, Nunez and Barracas occupy the second-tier in terms of affordability while Villa Urquiza, as noted previously on InvestBA, is growing in popularity and moving up the rankings in all categories.

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Buenos Aires Real Estate Activity: A New Year With Something to Build Upon

On January 27, 2010, In foreign investment, real estate, by InvestBA
2009 finished on a positive note in Buenos Aires. The trend should continue for the first half of 2010.

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 in Spanish)

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

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