Will The CEDIN Dollar Reignite Argentina’s Real Estate Market?

Patrick Archer aruba, real estate

El Dolar Cedin en Argentina

Real estate offices like this one in Buenos Aires closed their doors when market activity tanked in 2012.

That’s the billion dollar question Argentina real estate market participants are asking on the eve of the CEDIN dollar’s arrival next month.

The CEDIN (Certificado de Deposito Para Inversion) is a Certificate of Deposit for (Real Estate) Investment which begins circulating July 1 as part of a government-sponsored initiative to boost Central Bank reserves by issuing Cedines to those who choose to blanquear (to make white) undeclared dollars currently in the black.

Today iProfesional offers a detailed analysis of the hopes, doubts, fears and crossed fingers of Argentina developers, brokers, notaries and of course potential sellers who put their listings en el freezer once the currency controls took effect in late 2011. The result was monthly double-digit declines in real estate activity and a reluctant pesofication of the new construction market.

The downward trend has carried over into 2013 finally prompting the Argentina Real Estate Chamber to abandon publishing monthly figures in favor of a perhaps less painful quarterly report. That pain could lessen dramatically in Q3 if there is a surge in CEDIN confidence and circulation. That will depend largely on how smoothly the first Cedin-centric transactions go and how quickly greenbacks arrive at the closing table.

On the positive side, the Chamber believes the CEDIN’s arrival will signal the end of pesofication as dollars return to the vernacular of local buyers and sellers, while the government believes a secondary market for Cedines will emerge for those who choose to exchange their certificates for dollars instead of bricks. Toward that end, there is already discussion of a 6/7/8 scenario with Cedines trading at 7 between the official and unofficial rates. (Full Story in Spanish)

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