Buenos Aires Real Estate

New neighbourhoods are coming under developer’s microscopes and the Buenos Aires real estate market is changing.

Buying terrain and constructing a property is how developers make a profit. Developers buy terrain and develop on it based on the factors of this following equation:

(price + buildable area) x good location = PROFIT

If developers can’t find land that has the above combination of qualities then they won’t be able to make any money. This is what is happening in the typically popular property hotspots of Recoleta, Palermo Chico and Barrio Norte.

Land here costs on average $ 1200-1800 per m2, not forgetting the huge construction costs that have to be added as well. The simple fact is that there are no more available and profitable plots of land to be found. The last of the hidden treasure has been unearthed and turned into chic condominium high-rises.

So where to look now?

The property treasure map now hovers over different parts of Buenos Aires. Villa Urquiza, Barracas, Saavedra, Almagro and Caballito are now the neighbourhoods attracting interest from developers.

What are the advantages of buying here?

The prices are lower here, which offers developers more competitive final costs. To give an example of the prices here, a plot of land located on a corner of two blocks, (the most sought after for developers) in an ideal location costs $ 950 m2. Prices are lower here because there is less demand, which, in turn, also means that there is more land and more capacity to build. Developers won’t have the headache of having to build a high-rise structure on an impossibly small strip of land. Terrains here often exceed 1000 or 1500m2, giving architects more freedom and buildable space.

The negative aspect of buying in these areas is that they are a little more risky. Developers in Palermo, for instance, used to be practically guaranteed a profitable return on their investment. However, buying land in Saavedra, for example, does not come with so many guarantees. Villa Urquiza, Almagro, Núñez and Saavedra are considered to be on the outskirts of the city. They are all areas that are less central and accessible than Recoleta, Barrio Norte and Palermo. Plus, tourists are less likely to rent in an area that is unknown, may have a bad reputation for security or that is considered to be too far from the tourist attractions of the city centre.

Nevertheless, developers have no choice. In the more central neighbourhoods, prices are high because of the high demand. Land owners are right to have such high prices, but in some cases the prices are excessive and unrealistic.

Times are a-changing and in a few years trends will have changed and people will be kicking themselves for not having invested in these neighbourhoods.