The Buenos Aires Notary College is out today with their monthly real estate sales data, and April marked another double-digit drop in closings compared to last year. The number of closings in the City of Buenos Aires was down 25% to 3,554 transactions worth US$342.6 million ($1.532 billion ARS) vs. April 2011.
So Argentines must be really be souring on real estate, right? In a word, No. Dig deeper below the bold YOY sales number headlines and you’ll see the vox populi is decidedly bullish on bricks. A front-page poll today in Cronista poses a simple question, If you couldn’t buy dollars, where would you put your savings? The Results: Automobiles: 9%, Argentine Pesos: 14%, Stocks & Bonds: 26% and Real Estate: 51%.
Yes, given the choice, one of every two Argentines would invest in real estate. And who can blame them when you consider the three alternatives: a car you can’t live in, a currency you can’t put faith in, or Facebook stock. Mix in the fact that there are no mortgages to speak of in Argentina and any fears of a US-style credit bubble quickly evaporate. On the supply side, prices will remain stable, because there is no oversupply situation a la Miami five years ago or Kangbashi today.
And the nascent pesofication of the Argentine real estate market will mean a 30% positive adjustment of property values for existing owners. As Fernando Poretta, president of the Mendoza branch of the Argentina Construction Chamber, tells Los Andes’ Mariano Zalazar today, “Properties valued in dollars that are converted to pesos will use the blue dollar as their basis of conversion. (Full Story in Spanish)
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