Real Emerging Property Markets are to be Found in South America
In a recent article “Real Emerging Property Markets are to be Found in South America,” in Property Wire, the analysis of South American real estate suggests that while the United States and European property markets are depressed, there are still many opportunities to make money in emerging markets. South America has many such emerging markets, specifically Argentina, Chile, Uruguay, and Venezuela. Brazil’s real estate market is considered to have already emerged, making it a less lucrative and somewhat less appealing option.
In the last quarter of 2007, the GDP in South America grew by 9.1%. In addition to this growth, many Latin American governments have policies that support foreign investment, tourism and improve infrastructure. These factors encourage buyers who want to escape the credit crunch and put their money in developing—but stable—markets.
Brazil was the first Latin American country to come strongly onto the property investment stage and now it is experiencing a boom in residential building. Brazil’s success has aided consumer confidence in South American real estate and the emerging markets of Argentina and Uruguay are benefiting from this. Visitors are up in the region as a whole, and the tourism infrastructure is growing rapidly.
The article sites Argentina as one of the best places in the world to live right now and argues that the nation’s trade and government surpluses are a draw for Europeans. Argentina has beaches, ski centers, mountains, and vast, open tracts of land for visitors and potential investors to enjoy. Property prices have risen 50% since 2002 and tourism has grown 10% ever year since then as well. There is high demand for rental properties and buy-to-let property owners make rental income of up to 6% of the original purchase price in Buenos Aires’s popular neighborhoods.
Between the giants of Argentina and Brazil is Uruguay, a small nation with 2.3 million tourists a year. Mar del Plata, a beach resort, is a big draw, as, increasingly, is eco-tourism inland. While foreigners have not bought a lot of property in Uruguay up to this point, the government has made the process easy and foreigners have the same rights as Uruguayans. There are no restrictions on transferring capital into the country and list prices for property usually include the 3% commission for real estate agents.
Chile is also an emerging property market and the government is willing to invest in infrastructure as well as protect property rights in the law. Santiago, Chile is a financial center of South America, so property there and in northern Chilean Patagonia is more expensive. However, there is a lot of untapped land in Chile that can still be gotten cheaply and may soon be worth a lot more.
In Venezuela, President Huge Chavez approved 566 million dollars worth of infrastructure projects. Potential investors should take note that Margarita Island is a Caribbean destination that is part of Venezuela; beach resorts and spas proliferate and visitor numbers grow 15% a year.
The article ends by reminding investors that nothing is certain, no matter how good it looks. 2008 may be the year that Latin American really feels the impact of the recession in the United States. External factors have had a lot to do with boosting these emerging markets, so they may depress them as well. However, no downturn is predicted for South America. The economies there should prove resilient and their beautiful beaches and culturally rich cities will probably remain as appealing as ever to investors.
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