Better 2010 hoped for Argentina’s housing market
Source: Global Property Guide
After a tumultuous 2009, Argentineans look forward to a better 2010 for the housing market and the economy. The resurgence of exports and pick up in tourism are expected to push the housing market.
Argentina saw falling housing sales but stable house prices in 2009. Property sales transactions in Buenos Aires, the capital, from January to October 2009 declined to 60,767 down by 26% compared to the same period in 2008, according to Reporte Inmobiliario, an online real estate magazine.
The global economic slowdown combined with the detrimental effects of A(H1N1) flu virus on tourism led to the decline in real estate sales. The relative stability of house prices, on the other hand, was attributed to the inexistence of Argentina’s mortgage market. Almost all real estate transactions are done in cash, usually in US dollars (with some done in euro).
The use of cash in property transactions insulates the housing market from interest rate changes. Hence, there are no huge house price increases as there are also no dramatic price falls.
According to market players, with the global economy showing signs of recovery in the latter part of 2009, real estate activity in Argentina started to pick up. Optimism is high and the improved situation is expected to continue in 2010.
Although 2010 is expected to be better than 2009, double-digit price increases seen from 2005 to 2007 are highly unlikely.
There are no major restrictions on foreign ownership of property in Argentina except for Argentine land near the border which is roughly within 100 km of the Chilean border. Foreigners can only buy real estate in that area as long as the property is 1) located in an urban or suburban area, 2) less than 5,000 sq. m., and 3) not intended for commercial purposes.
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