Buenos Aires Investors Turn to Real Estate Where Apartment Sales, Rents are Booming
Buenos Aires bank savings account holders have seen the light. They are gradually forsaking lower-interest investments and turning to real estate where apartment sales and rents are booming.
The latest research from the Provincial Notary College in Buenos Aires, Reporte Inmobilario and Property Wire shows:
- Apartment rents in March rose on average 5 percent to 20 percent above the February level.
- Property sales are up 77 percent over February.
- Rents jumped an average 5 percent to 20 percent in Barrio Norte, Centro, Puerto Recoleta and San Telmo.
- Puerto Madero rents soared 30% in March.
- Rents continue to rise in Belgrano, Palermo and Madero,
- Sales are also up on a quarterly basis, some rising to 7%.
- One bedroom apartments saw a 20% rise, two bedroom apartments were up 14% and three bedrooms up 5%.
Rent increases also vary according to location. Puerto Madero saw a 30% increase in rents for one bedroom apartments. San Telmo saw a 27% increase, Centro a 25% increase and Palermo an 18% rise.
Barrio Norte saw the biggest increase in rents from two bedroom apartments at 28%, San Telmo at 23% and Palermo at 21%. Rents for three bedroom apartments increased by 20% in Palermo, by 19% in Centro and by 12% in San Telmo.
Three bedroom apartments saw rents decrease in three barrios. They were down 1% in Recoleta, down 5% in Belgrano and down 11% in Puerto Madero.
In another aspect of Argentina's surging real estate industry, the government has taken new steps to limit foreigners from purchasing rights to certain lands. The reason: a rising demand for food.
The most controversial aspect of the legislation is its definition of "rural land." Rural land is defined as any land falling outside of an urban area, which in turn, is described as any area with 2,000 or more inhabitants.
According to legal sources following the new law, It effectively places most of Argentina's land under the provision, with additional restrictions for lands adjacent to the country's borders.
The law will apply retroactively and will not impact foreigners who already own this type of land, according to JDSupra of Buenos Aires. JDSupra is an online community, in which members of the legal world post their court filings, decisions, and articles to a searchable database that is free for anyone to use.
Fluctuating commodity prices, particularly with the price of food and basic staples, have created a sharp demand for arable land. The demand for arable land has, in turn, boosted the price of Argentina's rural land and caused a flurry of foreign investment, JDSupra notes.