New Developments Build and Sold in Pesos
There is a new and exciting movement on the horizon of the Buenos Aires real estate market. Developers are constructing and marketing properties that have prices in Argentine pesos. Realtors and developers in Buenos Aires have had to adapt to the new system that has become a US dollar free zone and are becoming more open to accepting pesos. There are now many new high-profile developments that are underway, or close to being finished, that can be paid for in pesos. This marks a kind of revolution in the Buenos Aires real estate market that previously only accepted dollars for properties.
New government restrictions have shaken up the economy causing many developers to invest in construction and real estate: a sector that has always survived economic instability. Developers are converting their Argentine pesos into property, which means that they are no longer afraid of accepting pesos. Real estate sold in pesos is infinitely easier to sell to the public and broadens what was previously quite a narrow market. Nonetheless, there are still issues with selling in pesos. For instance, building projects that are already finished will prefer to accept dollars as they will have initially invested US dollars in purchasing the land and building materials. Developers with finished properties will instead accept payment in dollars but with a discount of up to 15% off the asking price. Properties that are half finished will have been financed with a combination of dollars and pesos; thus they will accept payment in 50% pesos and 50% dollars, or in some cases, 100% paid for in pesos.
Projects that are starting out now – under the dollar restrictions – will benefit most from the pesification of the Argentine economy. Developers of these projects will finance the majority of the work in pesos. Demand continues to be strong in neighbourhoods such as Barrio Norte, Recoleta, Palermo, Belgrano, Caballito, AlmagroandBoedo. Plus, there is also continued growth in areas outside of Buenos Aires capital city like Tigre and Pilar. With the market operating in pesos, developers know that things are going to improve and there will be a healthy demand for peso properties in the future. This is especially true as more and more developers begin to offer payment and finance plans that can be paid for in pesos. Mortgages are virtually unheard of in Argentina so these finance plans are the closest thing that small-time buyers and families will have at being able to purchase their own property.
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