Is Argentine Real Estate a Safe Haven Following Peso Devaluation?

According to the CEO of RE/MAX Premium, there will be opportunities in the sector despite the jump in the official exchange rate following the primaries earlier this month

Photo: Anita Pouchard Serra/Bloomberg
By Belén Escobar (EN)
August 29, 2023 | 02:00 AM

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Buenos Aires — While the increase in rents and their legislation is still at the center of Argentina’s economic agenda, the real estate sector is optimistic for the property market, even after the central bank validated a 22% jump of the official US dollar exchange rate following the August 13 primaries.

“Contrary to what many believe, the 22% devaluation of the official dollar post-primary -- which also had a strong impact on the so-called blue dollar -- opened a panorama of opportunities in the real estate market, since a scenario of economic instability makes people take refuge even more in bricks and mortar,” according to Ariel Champanier, CEO of RE/MAX Premium.

He also ruled out that there will be a retraction in sales, and said that transactions will maintain their usual pace.

“I do not see a change of cycle after the devaluation and I believe that the demand trend that we have been having lately will continue, which so far this year has surpassed 2022 by 30%,″ he said.

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More demand anticipated

“There will be more demand because, in the face of unstable scenarios, people see in property an opportunity to safeguard their savings,” he said.

Photo: Anita Pouchard Serra/Bloombergdfd

“We are at a time when it is still cheap to buy,” he said. “I advise buying now because no one assures you that prices will continue to fall.”

According to data from online real estate classifieds portal Zonaprop, in the Greater Buenos Aires (GBA) area, yields are declining. In north GBA, yields are 3.57% per annum, meaning it takes 28 years to recover the purchase investment, 7% less than a year ago.

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The Pilar and Villa Rosa neighborhoods show a gross return of 5.4% and 5.3%, respectively. In this sense, they are the best neighborhoods for investors seeking to buy to rent.

In west GBA and south GBA, the yield is 3.24%. This means that it takes 30.9 years of renting to recover the purchase investment, 3% more than a year ago, whereas the Wilde and Caseros neighborhoods are positioned as the best neighborhoods to invest in, with yields of 5.9% and 5.1% respectively.