The Property Bubble in Argentina
To buy now or not to buy now? That is the question that has been troubling home buyers and property investors recently in Argentina. Is it a smart move to invest now? Is the market growing? Or is the property bubble set to burst? The price per metre square of property is at an all time high, so Buenos Aires Real Estate takes a looks at the market to see if the price tag is deserved.
In Argentina, buying property is generally a safe and stable way to save money and make an investment for the future. As well as providing a roof over your head, a property also serves as a giant piggy bank that can be turned to in an emergency or when you want to make an investment. Argentina has seen more than its fair share of economic instability and crises, so it makes sense that Argentines would prefer to invest their money in property rather than storing it in a savings account with a bank.
The financial system in Argentina means that only 6% of homeowners have a mortgage. Properties are, for the most part, paid for lock, stock and often in cash. This means that the property market is not dependent on the banks, as such is the case in Europe and the United States. The credit crunch crisis which is unfolding in the USA and Europe is as a result of over-optimistic and unsustainable crediting of mortgages. Rest assured that this could not happen in Argentina, so on that count the property market is stable.
However, despite this stability and lack of debt in the market, the boom and bust cycles of the Argentine economy could be a concern for buyers. It is certain that the property market in Buenos Aires is experiencing a boom. In Palermo, one of the most fashionable neighborhoods in the Argentine capital, property was always valued at around 1,200 dollars per squared metre yet now the current price tag is around $1,800 dollars. It’s important to analyze what has caused this huge increase in price, as this will reveal whether the increase in value is just a dangerous bubble that could burst or whether property really is worth more in Palermo. In recent years, in line with the increase in value here, the Palermo area has experienced a huge influx of services, infrastructure and amenities. The neighborhood is now more sought after and fashionable therefore prices have deservedly increased.
On the other hand, this steep price increase has occurred across the board in the Argentine property market, not just in Palermo. So in the zones where prices have increased with no tangible cause then, regrettably, there is a property bubble that is set to burst in the next couple of years. For those thinking of investing in property in Buenos Aires, be aware that prices are higher than usual. However, according to experts and economists, the market is set to recover in the next five years.
Making a smart decision and buying at the right time is the biggest worry for buyers. By looking at the market closely we can see that the Buenos Aires real Estate market is a good place to invest, but only if you’re planning on retaining your property for more than 5 years.
Go back to Argentina Real Estate News:
Argentina Real Estate Trusts - Investments in Construction at Cost in Argentina
How to build a house in Argentina
BUENOS AIRES HABITAT a pioneer of the extended stay hotel-style apartment concept in Buenos Aires. Offers luxurious furnished apartments in Buenos Aires for temporary rent as an alternative to high-class hotels. Whether your visit is for a few days or a few months, for vacation or business trip, we will make your Buenos Aires experience memorable. All of our Buenos Aires apartments offer high-speed internet access, cable TV and housekeeping service.
