The Good Times are Here Again” from Global Property Guides
According to an article in Global Property Guide, the “good times” have returned to Argentina, particularly to Argentine real estate. 2007 was a year of strong economic expansion, as was 2006, and this expansion is causing the real estate business in Argentina to grow and thrive.
Economic growth in Argentina has meant growth in residential demand. The cost of buying a used apartment in Buenos Aires rose in price by 13 percent in 2007 and the cost of renting one rose even more. For houses, yields rose from 5.3 percent in 2007 and prices on houses continued to rise. In all these categories, higher prices correspond to swankier, in-demand neighborhoods, such as Recoleta-Retiro and Barrio Norte. This upward price trend in real estate is expected to continue because middle class families often cannot afford to get mortgage finance for their first homes. Therefore, they will have to continue renting.
In addition to apartment and house prices rising, real estate construction has been booming too. However, construction is not cheap and construction costs and the price of land are rising. These high costs are causing developers to build smaller units and, it is predicted, will slow building in 2008. There has also been some resistance in high price areas to new developments, causing builders to build in slightly poorer areas.
Global Property Guide paints an overall positive picture of Argentina’s economic recovery from the crash, noting that Argentina is now one of the fastest growing countries in Latin America. The estimated GDP per capita growth from 2002 to 2007 was 40.6 percent. Foreign investment in the country remains strong, as Argentina is still a relatively inexpensive alternative, and inflation is under control. In 2007, it is expected to be reported at 9.5 percent.
Last October, the presidency passed from Nestor Kirchner to his wife, Cristina Fernandez, suggesting that Kirchner’s policies of promoting foreign investment and leaving the housing market alone will continue into his wife’s presidency.
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