Should You Invest?
Since the economic disaster of 2001, Argentina has been quick
to rebuild itself and the real estate market is the
sector displaying the strongest growth. Importantly it still
has the potential to grow a lot further which is good news for
investors.
- Argentina has high rental yields especially in major cities
such as the capital, Buenos Aires.
- The rental market is strictly pro-landlord.
- The transaction costs when purchasing a property are low to
moderate between the buyer and seller.
- There are no restrictions on foreign ownership; the investor
only has to obtain a CDI number (tax ID) from the government before
purchasing.
- The growing tourist industry is creating a property boom,
especially in the rental market.
- Property in Argentina is cheap to buy which combined with high
rental yields makes it a perfect place for investors to gain
profitable returns.
- The cost of living in Argentina is cheap, which allows foreign
home owners to lead a fairly lavish lifestyle.
Rental Yields
The economic crisis in 2001 affected rental yields more than it
affected house prices; Argentinean landlords could expect high
rental yields of 10% to 12% - but although yields are still high,
average yields in urban areas now reach only 8% to 10%
for apartments. In suburban areas, rental yields only reach on
average 6% to 8% for apartments. Luxury apartments in major cities
do achieve higher yields; for example, a 250 sq m apartment in
Buenos Aires has a rental yield of 10%.
Location
Type of
Property |
size
(m2) |
average
price
to buy
(us$) |
cost per
m2 to buy
(us$) |
average
Price
to rent
(us$) |
cost per
m2 to rent
(us$) |
yield
(%) |
|
Buenos Aires-
Downtown Apartments
|
|
|
|
|
|
|
| |
50 |
76,505 |
1,530 |
647 |
12.9 |
- |
| |
100 |
176,550 |
1,766 |
1,412 |
14.1 |
9.60% |
| |
150 |
275,000 |
1,833 |
1,900 |
12.7 |
8.29% |
| |
200 |
376,640 |
1,833 |
2,943 |
14.7 |
9.38% |
| |
250 |
470,800 |
1,833 |
4,002 |
16 |
10.20% |
| |
450 |
890,000 |
1,978 |
6,000 |
13.3 |
8.09% |
Buenos Aires-
Suburbs - Houses |
|
|
|
|
|
|
| |
100 |
141,240 |
1,412 |
530 |
5.3 |
0.05% |
| |
200 |
294,250 |
1,471 |
1,648 |
8.2 |
0.07% |
| |
300 |
447,260 |
1,491 |
2,589 |
8.6 |
0.07% |
| + garden |
350 |
706,200 |
2,018 |
4,708 |
13.5 |
0.08% |
| + garden |
450 |
882750 |
1,962 |
5,885 |
13.1 |
0.08% |
| Rural and Small Town Houses |
|
|
|
|
|
|
| |
150 |
82,390 |
549 |
647 |
4.3 |
0.09% |
| |
200 |
141,240 |
706 |
1,117 |
5.9 |
0.10% |
| |
300 |
200,000 |
667 |
1,412 |
4.7 |
0.08% |
| |
400 |
400,000 |
1000 |
3,900 |
9.8 |
0.12% |
| |
800 |
1,300,000 |
1625 |
6,000 |
7.5 |
0.06% |
Source:
Global Property Guide
Price History
The Argentine economy is booming and the real estate market is
benefiting considerably. The reason for this extensive growth is
tourism, and short term rents are becoming very popular. Property
is cheap to buy, rental yields are high, and the property market
still has room to grow, which makes this a great place to
invest. Property prices for 350 – 450 sq m properties are selling
at US$700,000 to US$880,000, and they can be expected to
produce a rental yield of 8%. With the rise in property
prices, the locals are finding it hard to buy their own houses
as although property seems affordable to foreigners, locals
have to live off lower incomes.
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