In the fertile wine country of Mendoza, the housing market is faltering after a sharp decline in the Argentine peso.
Argentina’s housing market “had a promising start in the first quarter” after a strong performance last year, said Miriam Rivas, a senior sales leader at Raul Mel Propiedades, a brokerage in Buenos Aires. But in recent months, currency fluctuations and economic turbulence have slowed activity considerably, as the country struggles to curb inflation and stimulate foreign investment.
Argentina's central bank has raised interest rates for the third time in eight days as the country's currency, the peso, continues to fall sharply.
Argentina's real estate sector is preparing for a development boom spurred by a successful tax amnesty program and an expected revival in mortgage lending, potentially prompting a rebound in construction jobs and boosting bank loans.
Puerto Madero is “a very premium market, the most expensive and exclusive neighborhood in Buenos Aires,” said Mercedes Ginevra, the owner of Ginevra Sotheby’s International Realty.
In May, the Related Group, a Miami-based developer, announced a large luxury project, SLS LUX Puerto Madero. Eighty percent of its 127 condo residences presold within four months, said Carlos Rosso, the president of condominium development for the Related Group. It is expected to be completed in 2019, he said. Prices range from the low $600,000s to $4 million.
Argentina is still struggling with a dearth of hard currency and mortgages but with a change of government later this year, investors at home and abroad are positioning themselves for a real estate market revival they say is already taking root.
Real estate sales tanked in recent years due to stagflation and capital controls introduced by President Cristina Fernandez in 2011.
The presidential election in October is expected to bring in a more business-friendly government that will unravel some of Fernandez's policies.
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