For Sale Who are buying apartment and homes in Buenos Aires? Prices seem high relative to wages.

[no dinero]

I'm curious who are buying apartments and houses in Buenos Aires? I keep reading how the economy is bad and no one has money but I'm looking at real estate portals like https://www.zonaprop.com.ar/ and although prices seem relatively cheap for world capital cities, they seem high compared to local wages. I have a friend that is a lawyer and he is making about $1,500 USD per month.

How can locals afford these prices? I am looking for something in a nice area with 3 bedrooms and some space in the backyard. The prices listed are the same or more than many cities in the USA and there are no mortgages I'm told! All cash.

With the local wages so low, how do people afford to pay for these prices? The houses I'm looking for are over $400,000 USD. I don't understand how the average family buys a house in the city? Or are the prices on ZonaProp not real? Help me understand this?

 

[earlyretirement]

I'm curious who are buying apartments and houses in Buenos Aires? I keep reading how the economy is bad and no one has money but I'm looking at real estate portals like https://www.zonaprop.com.ar/ and although prices seem relatively cheap for world capital cities, they seem high compared to local wages. I have a friend that is a lawyer and he is making about $1,500 USD per month.

How can locals afford these prices? I am looking for something in a nice area with 3 bedrooms and some space in the backyard. The prices listed are the same or more than many cities in the USA and there are no mortgages I'm told! All cash.

With the local wages so low, how do people afford to pay for these prices? The houses I'm looking for are over $400,000 USD. I don't understand how the average family buys a house in the city? Or are the prices on ZonaProp not real? Help me understand this?

The dynamics of the Argentine real estate market differ significantly from that of the USA. You can't compare the two. The USA is mostly mortgages and loans. Although, the # of cash buyers in the USA has shot up over the past several years. And something like 40% of the houses are now paid off in the USA which is great.

Argentina's economy has been crazy over the years. Argentina has had a pretty unstable history over the past many decades. But it's partly because of this crazy unstable history that the ONLY safe investment in Argentina they say is "bricks" and land. People don't trust the banking like they do in the USA. NO ONE really trusts the banks in Argentina. And most people don't invest in stocks here like in the USA, where most have a 401K or Roth IRA. The only safe place is real estate. It's been a safe haven for preserving assets and storing value.

And since almost NO mortgages are here, prices are real here. Property prices have fluctuated over the past several decades. I was actually the largest buyer of residential real estate after the last crash in 2002. (https://buysellba.com/news-/-media?blogcategory=ApartmentsBA). Then I sold 95% of the portfolio in 2018/2019 at the peak. Now I'm buying all I can again as prices have fallen almost 50% in many areas.

Unlike the U.S., Argentina operates without a substantial mortgage system; all real estate transactions are conducted in cash. While this poses challenges for many individuals, it also eliminates the occurrence of foreclosures, providing a high level of security for investments. Remarkably, there have been instances where no taxes were paid for three decades, yet the government couldn't seize the property, reinforcing its reputation as a secure investment.

For many Argentines, trust in real estate runs deep, with generations putting their money into properties. Apartments purchased by grandparents decades ago still serve as residences for their descendants. Despite economic fluctuations, the stability of real estate is underscored by significant appreciation over the years. Even in the face of a market downturn, a property acquired for $30,000 in the 80s, now valued at $250,000 after a drop from $300,000, remains a solid long-term investment.

The pricing of Argentine real estate in dollars distinguishes it from other investment options available to the average Argentine. Given the country's history of currency fluctuations and inflation, the U.S. dollar has proven to be a reliable and secure currency. While investing in dollar-denominated stocks or electronic currency is often impractical or illegal, real estate remains a safe haven.

Beyond financial considerations, owning a home in Argentina carries a deep sense of security for its citizens. Rentals over the long haul are tough in periods like now where there are almost NO rentals on the long term market. The vast majority of Argentines own vs. rent. You can also make significant ROI doing Airbnb's.

Also, consider that Argentina had considerable wealth at the turn of the Century. Its GDP was ahead of Germany and France. It was one of the wealthiest countries in the world. A lot of wealth was passed down from generation to generation. Lots of my local friends inherited many properties. I have friends that have a portfolio of over 10+ properties passed down to them including their places where they live.

There is a LOT of local wealth which surprises many tourists or ex-pats. In fact, most of my Argentine friends net worth blows the net worth out of my American friends back in the USA.

Also, consider that many people live at home until they are married or much older vs. the USA. I had many employees that were in their 20's that were still living at home. Many times parents or grandparents loan money or pool money together to put down on real estate. Real estate is a safe play in Buenos Aires over the long haul if you're buying in great areas. Especially Recoleta or Palermo.

I estimate that about 10% of the CABA are wealthy and this is a huge amount of people. Surprisingly, Argentina holds an estimated 300 to 400 billion US dollars, making it the second-highest per capita globally, just behind the USA.

The staggering amount of U.S. dollars stashed beneath Argentine mattresses, hidden in floorboards, and deposited in foreign bank accounts is truly astounding. Various estimates place this figure near $60 billion USD or even higher, making it a substantial portion of the world's total dollar-denominated cash. Argentines are believed to possess approximately one in every 15 cash dollars in circulation globally, with only China and Russia surpassing them in holdings, according to some sources.

Contrary to the misconception that there is a shortage of dollars for property purchases in Argentina, the actual issue lies in the lack of confidence in the real estate market. It currently exhibits the lowest rental returns in its history, except for a few bubble markets in select provinces. Despite this, Argentinians are the predominant buyers from Latin America in the real estate markets of Miami and Punta del Este, surpassing even much larger Brazil. The financial crises in Argentina have paradoxically favored the very wealthy, providing them with opportunities to acquire properties at significantly reduced prices, which they can then hold as long-term investments.

Real estate has been very very good to most of us that purchased after the crash in 2002. I have some apartments that I purchased for $47,000 and sold for $200,000 several years later and made 3X the purchase price in rentals in the meantime. Many people are buying right now. I called the bottom in August 2023 and entered the market again.

 

[Larry]

According to information shared by a local real estate agent within my wife's family, the housing market has been significantly impacted by the COVID pandemic. Instead of actively selling, they are predominantly renting out properties. Homeowners are reluctant to reduce sale prices, maintaining them at a level suggesting economic stability, despite the actual financial challenges faced by many Argentines in recent years. The increasing financial strain on the population has resulted in a decline in homebuyers, as people can no longer afford to make such substantial purchases. Interestingly, the agent humorously notes that Argentina stands out as the only country where individuals opt for installment plans when buying cars but make cash transactions for real estate acquisitions.

 

[Anti Hero]

Affording real estate in Argentina is not easily explained by a set logic, as various individuals find unique ways to make it work. Relying solely on statistics like average salaries provides limited insights. The country's historical context plays a crucial role, as Argentina was once prosperous with a robust middle class, and the accumulated wealth from that era persists through generations. As these older generations pass away, their descendants inherit the remaining wealth, often opting to invest it back into property due to difficulties and expenses associated with taking it out of the country.

In the case of the professional class, a couple with dual incomes, a decade or more of dollar savings, strategic living arrangements such as residing with family or abroad, and financial assistance or loans from their families can culminate in the purchase of a $350,000 house in cash. Business owners, having experienced prosperous years, often secure their earnings in property to safeguard against potential business downturns. However, some may face financial challenges later on, struggling to keep up with property expenses in affluent neighborhoods.

Financing options also include direct arrangements with developers for land purchases, with payments spread over several years in pesos, creating an attractive prospect, especially during periods of significant exchange rate differentials. Over time, as these areas become established and in demand, properties can be sold in dollars, contributing to the influx of USD capital.

In the real estate market, listed prices often lack rationale, as supply surpasses demand. Some properties with exorbitant price tags remain unsold for years due to impractical valuation and outdated conditions. Conversely, well-priced properties with value propositions sell quickly, sometimes at a notable discount from the initial asking price. Buyers are advised to exercise caution, shop around, and consider the duration of a listing, as a lengthy presence on the market often indicates an inflated valuation. Ultimately, successful transactions are driven by sellers' motivations, with many sales occurring below the asking price or swiftly for properties offering excellent value. In today's economic climate, thorough research and a discerning eye are essential for navigating the real estate landscape.

 

[Pink Panther]

Sellers can indefinitely hold onto properties since there are no mortgages in play. Most people own their property outright, leading to minimal expenses limited to utilities and taxes. In comparison, the overhead costs associated with a $300,000 apartment in this region are significantly lower than those for a similar property in the USA or Europe.

During the pandemic, I've encountered several Argentines who have invested in real estate. Numerous affordable options exist, well below the $300,000 mark, contingent on factors such as location, size, and personal preferences. In Buenos Aires, the majority of apartments fall below the $200,000 threshold, with many priced under $100,000. Although these properties may not be situated in affluent areas like Belgrano or Recoleta, numerous Argentines happily reside in neighborhoods such as Barracas, Monserrat, La Paternal, Parque Patricio, and Flores. These apartments typically range from $75,000 to $100,000, offering smaller and less luxurious living spaces. However, for many Argentines, owning a modest one-bedroom apartment is a more appealing option than renting a larger two-bedroom unit.

 

[Flamingo]

Some properties are for sale forever! Many owners aren't desperate to sell and they will set a price and just wait years until they get their price. Since they have no mortgage and often times renting it out and making cash flow on it or living in it and have almost no HOA fees and low expenses on utilities they can wait.

I have a friend that set a crazy high price and she just waited 4 years until she got her price. Crazy to see. Argentina is truly special.

 

[Nasdaq]

Considerations when opting for "off the plan" purchases of new apartments in the city could be valuable if you're not in a hurry to relocate and desire a property with a higher likelihood of appreciating in value.

Typically, a deposit of 30% in USD is required. Regarding the remaining balance, some developers offer fixed installments (cuotas) ranging from 24-60 in USD, while others may use ARS, periodically adjusted based on the Cámara of Constructions rates. To be deemed "creditworthy" for a $350k apartment purchase, you generally need a monthly income of around US$6000, whether the cuotas are in ARS or USD. Despite the risk associated with potential fluctuations in currency exchange rates, the absence of interest makes this financing option relatively "inexpensive," particularly if you already have the cash to make a full purchase.

Moreover, in a uniquely Argentine aspect, many projects, especially upscale ones like those in Puerto Madero, qualify for "apto para blanqueo," indicating they are state-sanctioned and legal methods of converting income earned "en negro" (off the books) into a legitimate asset "en blanco" (on the books).

Considering that numerous projects at this price level or higher often sell the majority of their units well before completion, especially the more luxurious ones, it becomes evident that not all buyers face challenges in this market.

 

[Starfish]

Could you provide some guidance? In Argentina, are there instances where, following the Notary's signing of the Escritura, the right of possession and ownership of real estate cannot be recorded in the Central register? I presume that the Notary's signature on the escritura serves as the paramount evidence of legitimacy for the transfer of ownership. Thank you.

 

[Sylvie]

I've never met ANY Argentine with a mortgage. They are almost non-existent here. Some architects I know have secured short bridge loans to renovate and subsequently sell a property within 1 or 2 years. However, the norm for the average person is to pay in cash. Like literally $100 US bills.

I've observed that high-quality apartments tend to sell very close to the asking price and quite rapidly. Recently, I've seen several apartments in Recoleta sell within a month when priced appropriately—even if they aren't necessarily inexpensive. A friend was interested in one last fall, which promptly sold for around $250k.

There exists an upper middle class here that engages in buying and selling homes. The local economy accommodates a considerable number of affluent individuals, and well-maintained older properties are in demand. However, like everything else in Argentina, the real estate market operates by its own rules and requires some time to navigate.

Many of my Argentine friends have benefited from the inflation of the last 15 to 20 years. I know individuals who initially purchased modest properties for around $20k, and after 10 or 15 years, these properties appreciated enough for them to upgrade. When my spouse and I bought our place in 2007, there were PH's for sale in Palermo Hollywood for $150k, and now, all of those are priced at upwards of $550k.

 

[earlyretirement]

You can deal directly with the developers, bypassing any involvement from banks. If you come across an intriguing new project in advertisements, reach out to the developer and inquire about the financing options available. Additionally, gather information on the current status of the project and its timeline. For instance, you might prefer a project where on-site work has commenced, as it instills confidence—everything paid before delivery, along with the ongoing commitment, is essentially at risk if the project lacks organization.

 

[Jenny]

I am eyeing some properties. There are plain pre-existing old places that are priced the same or more than new properties with amenities. From an investment point of view, it makes no sense.

There is an old nice apartment in a great location that has been on the market for years with a price tag that ranged from over 230k in 2019 to 160k in 2022. After pressing the real estate agent, we found out that besides needing substantial renovation works, the HOA expenses are about $230 USD/month because a full time encargado they can't get rid of. The hallways are impeccable, but there is no added value in that vs. a new building with amenities and likely less monthly expenses.

Some considerations applied abroad when buying real estate are not really applicable here, such as contingencies (do not exist here), cash vs. financing (everybody buys cash), properties sitting longer on the market or listed with multiple agents are a good fit for aggressive offers (no way to put pressure on some sellers, it seems they just keep their property on sale "just in case" and not because they want actually sell it).

 

[Huge Hurry]

A crucial aspect of deciding whether to purchase an apartment here involves thorough research into the administration company, administrator, doorman situation, and the monthly expenses. If these terms are unfamiliar, it's essential to understand them before committing to any agreement.

Consider the state of the electric meters and recent electrical service—outdated gas systems are prone to breaking, potentially resulting in extended periods without hot water or heating. Older buildings sometimes have water pipes break, roof leaks, etc.

Smaller buildings often prove more manageable than larger ones. Dealing with administration in buildings with 100 to 200 apartments can be chaotic, and you may find yourself having to accept whatever they dictate. In contrast, with 5 or 7 apartments, there's a chance to comprehend and influence the proceedings. But it just depends.

The age and condition of the building significantly impact the price. Among the multitude of properties for sale, it's crucial not to hesitate to walk away from signs of trouble before making a purchase.

The most desirable apartments are typically situated in century-old buildings with sturdy walls, spacious windows, and wood or tile floors. Ideally, these units have undergone recent renovations in the kitchens and bathrooms, including the installation of new air conditioning units (heater/AC's) in the last five years. Otherwise, be prepared to factor in the costs of remodeling kitchens and bathrooms, typically around $10,000 USD each, and potentially additional expenses for new air conditioners.

Inspect the electrical service, checking for three-prong outlets, the presence of grounding, and understanding the difference between fuses and circuit breakers. If you lack this knowledge, hiring a professional is essential, as there aren't housing inspection services readily available as in some other countries.

Similar to buying used cars in the US, assume that part of the price includes potential expenses for new tires, a new battery, or a timing belt. Similarly, when purchasing homes here, sellers often overlook repairs or maintenance for years, requiring careful consideration.

While location is important, it's just one of many factors to weigh in the complex process of buying property in this region, emphasizing the need for extensive education and awareness compared to many other places.

 

[Fish Tacos]

I have a query regarding the role of real estate agents in handling high-end properties.

I'm looking to purchase an expensive property in CABA, and I've encountered some challenges with the real estate agent, who is a well-known one. Could experienced members here offer guidance on how to address these issues?

Here are some concerns I have, and I'm unsure how to resolve them or if I might be mistaken. Your guidance would be appreciated:

1. The real estate agent refuses to let me meet/talk/see/do a video call with the owner until the day of signing the escritura. Is this a standard practice, or is there a way to address this concern?
   
   
2. The agent is requesting a 4% commission simply for having the property and showing it to me once. This seems high for an expensive property. What are the legal regulations in the city regarding this, and what services are expected to justify a 4% commission?
   
   
3. They are asking for a fee to reveal property papers to my chosen escribano, with the possibility of a refund if I choose not to buy after reviewing the papers. What are the CABA laws regarding this?
   
   
4. The property, as seen in photos, was fully furnished and decorated. However, when I visited, at least 50% had been removed. I expressed interest in buying it as is, but the agent claims it's impossible. Is there a way to discuss this with the owner directly?
   
   
5. I plan to buy and hold the property for a lifetime. They've agreed to lower the price in escritura by 40%. Are there any drawbacks to this, considering I have no intention to flip or resell?
   
   
6. What is the correct percentage fee for an escribano in the present day? Is it based on the paid price or the price as stated in the escritura?
   
   
7. I offered to pay 33% immediately and requested 6 months to pay the rest, but the agent declined without consulting the owner. How can such payment negotiations be approached in high-end deals?
   
   
8. How is cash transferred in very high-end deals like this?
   
   
9. Despite it being an extremely expensive property, the agent is unwilling to lower the price even by $1 from the listed price. Are there any strategies to negotiate in such scenarios?

Overall, I'm not pleased with the dealings with the agent, but I'm very interested in the property. I would appreciate any advice on these nine concerns.