Buenos Aires Real Estate

The recent increases in property demand, prices and movement of the Argentine real estate market has led some to ask some serious questions about the stability of the market. Here is an explanation of the recent Argentina real estate phenomenon to establish whether the bubble is about to burst or whether it will continue to grow in an upwards direction. The star of the Argentine economy in recent years has, without a doubt, been the property market. This sector has shown unabated growth and has actually boosted the economy in general: feeding the construction industry in all the major urban areas of Argentina including Buenos Aires, Cordoba and Rosario.

The increase in development projects and demand for developable land has seen the improvement and regeneration of new areas. Whole neighborhoods have seen their local area improve and property values go up thanks to the real estate market. However, the question still remains as to whether the rises in prices and demand are reaching their peak and the bubble could be about to burst. Economic and real estate analysts are asking themselves: how much longer with growth continue? And most importantly: how is it possible that prices are increasing in dollars, at a rate much higher than other prices? The growth in the Argentina real estate market seems to have left behind the everyday buyer. Today, the average yearly salary can afford to purchase just 7 to 9 meters squared of a new property whereas, in the 90s, the average annual salary was the equivalent of 35m2. As you can see, the average Joe, earning an average salary will have to wait years before they can buy more than just a few meters squared.

Buyers in the Argentine real estate market tend to use property as a savings bank account where they can safely keep money without fear of it losing value. These buyers pay in cash up front and do not have any debts attached to the property. This typically argentine phenomenon means that the market is stable and not looking to burst as there is no credit involved in most cases, unlike the unstable US model that collapsed recently. The Argentine real estate will also continue to be prosperous due to the changes in society. Nowadays, people live alone for longer, families live apart and a new social class with buying power is also emerging in Argentina.
However, some factors could slow the impetus of the real estate market in Argentina: a sharp increase in construction costs, the devaluation of land and big changes in the economy.