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La Nacion: 5 Buenos Aires Real Estate Trends and Predictions For 2011

On December 27, 2010, In real estate, by InvestBA
Puerto Madero View

Rose Colored Vista? BA brokers make their 2011 predictions, and InvestBA offers some balance.

La Nacion ends the year with a survey of local real estate brokers and developers (B&D) regarding their outlook and expectations for 2011. Considering the nature of their business, their collective forecast is predictably optimistic, so we’ll put our spin (IBA) on the list to keep things balanced. (Full Story in Spanish)

    1. B&D: The level of investor demand we have seen for the past year will continue in 2011, even though it is an election year. IBA: The importance of the upcoming elections cannot be diminished, especially given the unrest of the past few weeks. An administration that emulates Brazil and Chile in terms of encouraging DFI, promoting transparency, eschewing populist rhetoric and actually enforcing existing immigration and property laws will go a long way toward restoring confidence.
    2. B&D: The greatest demand will be among buyers looking for units under US$200,000, but there is a growing niche looking for more expensive offerings. IBA: The under-$200,000 market will be strongest in emerging barrios like Villa Crespo, Villa Urquiza and Barracas where that sum actually buys a decent-sized apartment. 2 and 3-room units with good locations/views in the Big 3 are well north of US$200,000.
    3. B&D: Values per square foot will not decrease, because the local real estate market is not fueled by cheap credit, but rather cash and real investment. IBA: The all-cash factor is an undeniable advantage of the real estate markets in Argentina and Uruguay, but no guarantee of a price floor. Cash or credit, if there is an oversupply of units in a given market (e.g., Puerto de Madero, Mar del Plata), prices per square foot will adjust accordingly.
    4. B&D: Land prices will continue rising, especially in Capital Federal where available lots are increasingly scarce. IBA: Agreed. Ditto for construction costs.
    5. B&D: Small units which can be resold quickly will be the most in demand. IBA: Cheaper is not necessarily better, and developers who only build 1 and 2-room units in the city’s most expensive neighborhoods are simply following the herd. The trailblazers will be recycling buildings and developing large units in BA’s emerging barrios with Subte access.

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

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Slideshow: The Top 10 Buenos Aires Neighborhoods Based on Average Price

On November 17, 2010, In foreign investment, real estate, by InvestBA

Last week’s Salon del Mercado Inmobiliario brought thousands of property peddlers, purchasers and prognosticators to Palermo for the annual real estate Expo. Despite rising inflation and the political uncertainty leading up to the 2011 elections, the lingering mistrust of banks and lack of viable investment alternatives bode well for Buenos Aires real estate in the coming year. On the second day of SMI, iProfesional published a Reporte Inmobiliario ranking of BA neighborhoods based on average price per square foot of an existing 2 or 3-room apartment.

Today InvestBA presents that ranking in slideshow format with photos and Google maps. The ranking compares properties in each barrio based on median price per SF in July 2009 and July 2010. It’s interesting to note the strongest double-digit price increases occurred in the most affordable barrios like Villa Urquiza and Saavedra while the two most expensive neighborhoods actually showed YOY price declines.

As mentioned last week, the oversupply of small 1 and 2-room units is leading many developers to the more affordable BA barrios where they can build more spacious 3 and 4-room apartments. New Subte stations, shopping centers and GCBA cultural offerings are making these neighborhoods more attractive destinations for locals and foreign investors alike. (Note: Given the lack of existing 2 & 3-room inventory, Puerto Madero was excluded from the list.)

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

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Subte Expansion Drives Buenos Aires Real Estate Development

On August 9, 2010, In ba government, foreign investment, real estate, by InvestBA
The Corrientes Subway Station on the H Line in Buenos Aires

The Subte's expansion is shaping the residential & commercial landscape of BA barrios.

Of all the amenities Buenos Aires property buyers look for, one of the most valuable is actually state-owned and underground. The Buenos Aires Subte transports well over 1.5 million passengers a day along six lines, and Micaela Vacca of La Razon says future underground stations are shaping the residential and commercial landscape of the barrios above.

“The opening of new stations not only increases ridership, it also revitalizes different areas of the city,” Vacca writes, “a growing subway network acts as an economic motor, generating greater interest and expanding investment in housing and services.” For proof, just look at the recent appreciation of properties in neighborhoods like Flores and Villa Urquiza, one of our favorite value plays.

Median residential prices in Villa Urquiza rose 10% last year from US$148/SF in 2009 to $163/SF today. In the zone of Urquiza bordered by Roosevelt, Alvarez Thomas, Congreso y Triunvirato, there are 49 new developments under construction, and many of those buildings feature 3 and 4-room apartments meaning developers anticipate more families will move to the subte-enhanced neighborhood.

Flores, meanwhile, has seen an 8% growth in median prices since the Puan and Carabobo stations opened on the A Line. The H Line, which began service in 2007, will see the Corrientes station open later this year, while the future Hosptiales and Parque Patricios stations are helping fuel new development in areas like the BA Tech District.

From demographics to density, incentives to zoning, developers have multiple factors to consider when choosing the perfect location in BA. Based on this market data, maybe a Subte long-range planning map should be their guide.  (Full article in Spanish)

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

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Hogar Dulce Hogar: Buenos Aires Homes Holding Value

On July 24, 2010, In foreign investment, real estate, by InvestBA
ba-homes

This 3/2 BA residence with 1,800 square feet and a private garden is on the market for $269,000.

While most of the analysis and data in our Real Estate channel centers on apartments and condominiums, La Nacion reminds us of the often overlooked values lurking in neighborhoods throughout Buenos Aires: homes. Patient and discriminating househunters can often find attractive, reasonably-priced homes scattered in and around the multiple new construction mid-rises in BA.

When considering the purchase of an existing home in BA, zoning is often the top consideration, because porteno homeowners don’t want to be sandwiched between high-rises. For that reason, areas like Almagro, Villa Crespo and Barrio Ingles where high-rise construction is prohibited are gaining in popularity, as are house-centric barrios like Villa Pueyrredon and Villa Urquiza which we profiled earlier this year.

In these neighborhoods, one can buy a quality three-bedroom home with a garage and garden for around US$200,000 to $250,000. La Nacion says cost per square foot is one of the most attractive metrics for those considering a BA home purchase, while other advantages include the option of building additions, private spaces like terraces and gardens with outdoor grilling areas and no HOA fees for common expenses and building maintenance.

Given the high demand and relatively low inventory level of existing homes in BA, building a new home is often a good alternative, but lot prices in a given neighborhood are the key factor in the build vs. buy analysis. (Full Story in Spanish)

For more information on BA 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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