In this section I am including interesting and informative articles about real estate in Buenos Aires, Argentina. Most of the authors of the articles are only now discovering the potential of real estate in Buenos Aires that I saw beginning in 2002. When everyone was moving their money out of Argentina, I started moving it in and recommending to others that they also purchase real estate here in Argentina. History has proven that I was correct. I continue to recommend real estate as a strong investment in Argentina.

I accurately forecasted real estate trends, the tremendous increase in tourism and the exchange rate several years ago when so called "experts" were predicting other things. I continue to be one of the largest purchasers in the entire world of residential real estate in Buenos Aires the past several years and I am stepping up our purchasing of apartments, houses, land, buildings and hotels.

mike@apartmentsba.com

International Homes Magazine
December 2007 Edition - Volume 14 # 10

Argentina – Why Cash and land are both still king in this vast country

"Few economic revivals have been quite as stirring as Argentina’s. Little over five years ago the country’s massive external debts brought on a full-scale depression, the peso became virtually worthless and millions of Argentines saw their banked savings disintegrate. Much has changed since – Argentina’s economy has rebounded strongly with annual GDP growth of around 5%, and it has been given the all clear from the IMF for the next decade – but general mistrust of banks remains. This has served to back up by an age-old Argentine conviction that true wealth lies in a tangible asset such as land, not money. In Latin America’s second largest country you truly are what you own.

By this measure Michael Koh of ApartmentsBA.com is one of Buenos Aires’ major players. Originally from the US, he has been at the forefront of the capital’s property market for the last five years, securing properties in BA’s emerging locations, renovating and reselling them for excellent profit as small-scale rental businesses. “Back in 2002 when I started looking at bringing money into Argentina people told me I was crazy,” says Mr Koh, “but I saw the potential of the economy, the real estate market, the exchange rate and tourism. All my forecasts have been spot on.” He cites as an example an apartment he purchased for $90,000 (£44,200) in 2004, which recently sold for $200,000 (£98,300).

Since late 2006, property values have continued to rise across the city. “While rates are plummeting in the USA due to sub-prime mortgage problems, prices in Argentina are soaring,” explains Mr Koh. “Just about everyone buying real estate is paying with 100% cash over the table so interest rates aren’t a concern.” Fast-growing areas include Recoleta, known as BA’s Mayfair, and Palermo Soho, Viejo and Hollywood. “These neighbourhoods continue to see strong demand and price growth as well as growing numbers of boutiques, restaurants and cafes,” says Mr Koh. “They’re trendy areas that attract tourists and locals alike and are a developer's dream. You can buy property for under $2,000 (£980) per m2 and I believe a ‘double’ could happen in Palermo within five to six years. Recoleta, meanwhile, will always be the safest and most affluent part of the city.” Apartments in the latter can cost in excess of $200,000 (£98,000) but see high rental demand. The renovated docklands of Puerto Madero are a former hotspot and one of the most expensive places in the city. With an average property price of $4,000 (£1,960) per m2, Mr Koh thinks the area is unlikely to match its past growth rates."

Moving to BA the easy(ish) way

Time Out Guidebook Summer/Autumn 2007

Germán Peterson steers you through the minefield of buying property in BA

Argentina has great real estate to offer. Whether you fancy a stunning penthouse apartment overlooking Buenos Aires, a chalet in Patagonia, a winery in Mendoza or just a nice pied á terre, price are still a fraction of what you would pay in the UK or in the US. And the quality of what is offered is amazing: all properties are in freehold, tiresome co-operative boards are unknown and maintenance fees and taxes are very low.

Buying property in Argentina seems quite easy at first glance, but after getting stuck in the Argentinean bureaucracy, or getting to know some of the local business practices, you will realize that in order to get your deal done smoothly you need to bear in mind some rules:

One – There are hardly any private offers in the market and nearly everything in the market and nearly everything is offered via real estate agents. But unlike in the US or in the UK, realtors are not responsible for the accuracy of their offer, so it is always best to double check.

Two – Never agree immediately on the offered price. If you do so, the seller will think he placed the offered price too low and will ask for at least 10% more. No matter what you feel about the price, always place a lower offer – at least five per cent below the asking price.

Three – Cash is king: real estate deals in Argentina are nearly always done in cash. Even if you are paying millions, when the deed is signed the buyer and the seller meet together in a bank to count bundles of greenbacks.

Four – Black is beautiful. Sadly, it is common practice to pay a part of the purchasing price in ‘black’, that is, beneath the radar of the tax man. But to avoid problems later on, if the amount that figures in the deed is at least 70% of the actual price paid or better, you should do the whole deal in ‘white’.

Five – All deals are in US Dollars, but getting them into the country is not that easy. To avoid speculation on the peso, Argentina introduced a law in 2005 stating that all transfers by non-resident foreigners are subject to a 30% withheld retention for one year unless the purpose of the transfer is a direct investment in real estate, production, and so on – and proving that is a bureaucratic hassle.

Six – Make a good choice when selecting your notary public (escribano). He or she is the person who prepares the deed, checks all the papers and documents and makes sure that all bills and duties are paid. He or she is the one who finds out if there are any legal encumbrances, liens or defects in the title, and if there are, how they can be solved.

Seven – Argentineans are not well known for their taxpaying discipline – but you should be. Non-resident foreigners have to request prior approval from the AFIP (the local version of the IRS), before selling their property. And be prepared; these guys are much smarter than you probably think. Not only will they check if you have paid the municipality duties, property and wealth taxes, but they will also look into your utility bills, to find out if you have rented out your apartment while not resident in Argentina.

Keep in mind these few suggestions and you will be able to enjoy the apartment/house/estancia of your dream for many, many years, as have done many celebrities such as Ted Turner, Michael Douglas, George Soros, Luciano Benetton, Maia Sworowski, and Sylvester Stallone. Happy Hunting!

Some recommended agencies

ApartmentsBA

www.apartmentsba.com

From Times Online

February 23, 2007

By Mary Gold

A stake in Argentina

Flats designed by Norman Foster may lure investors to Buenos Aires

ARGENTINA is famous for cattle, Eva Perón, its red wine — and a series of devastating economic crises. Despite this financial instability, or perhaps because of it, the country offers many advantages to British property buyers. So is this really a sensible time to invest in Argentina?

One source of encouragement is its economic growth — up last year by an estimated 8.5 per cent. Another is that tourism is booming: according to Argentina’s La Nación newspaper, it has been practically impossible to beg, borrow or steal plane tickets to the capital recently. Economy fares to Buenos Aires are hard to come by, and the city’s five-star hotels are said to be running at 95 per cent occupancy. Last year, 3,000 new jobs were created by tourism and it is anticipated that 12 per cent of the workforce will be employed in the sector by 2010.

All of which should be good signs for the local property market. Alan Faena, a fashion designer-turned-hotelier-turned-property developer, would certainly hope so. He was responsible for regenerating Puerto Madero in east Buenos Aires, an area comparable with London’s Docklands. When he opened his luxurious boutique hotel, modestly called the Faena Hotel and Universe, there were only run-down warehouses and a deserted transport canal to be found there. Now, Hilton and Sofitel have opened hotels in the area; boutique shops and restaurants have followed.

It is in Puerto Madero that Faena launched his latest housing development, called El Aleph (“The A”). Designed by Norman Foster, the development will have 180 homes, starting at £146,000 for a one-bedroom flat, £305,000 for a two-bedroom flat and between £1 million and £3.5 million for a penthouse. El Aleph consists of two buildings overlooking the canal and park, and will include a pool, spa, restaurant, theatre, shops and a five-star hotel. The hotel will manage the rental of the flat, should you want to let it out.

It is, by some way, the most expensive development in Buenos Aires, a fact that Faena is quick to acknowledge. “With the apartments you are getting a respect for design and architecture,” he says. “That keeps prices up, though you will be getting a Foster apartment for a tenth of the price you would pay in London.”

Indeed, the relative strength of the pound is just one of Argentina’s many appealing factors. It would be difficult to spend more than £10 on a meal, for example. Similarly, a Faena flat has the finish you might expect of a million-pound City penthouse.

El Aleph is the fourth development undertaken by Faena in Puerto Madero. All have opulent interiors, with plenty of red and dark woods, harking back to Argentina’s belle époque, when it was one of the wealthiest countries in the world. Some Argentinians are doing very well for themselves today, with more local buyers able to afford the Faena price tag than you might assume: local buyers make up 60 per cent of sales, with the other 40 per cent including Britons, Americans and Spaniards.

One significant reason why Argentina will not suit all investors, however, is — inevitably — a question of finance: one side-effect of its recurrent economic problems is the extreme difficulty of getting a bank loan. “Argentina doesn’t understand mortgage debt,” confirms Andrew Langton, of Aylesford International in London, who is in charge of handling UK sales. “Everything tends to be cash, and purchases tend to be outright.”

LATIN AMERICAN HOT SPOTS

IF IT’S Latin American bargains you’re after, the best destination is Brazil, according to Charlie Prichard, of the property company Churchill Overseas. “Five years ago properties were five times the price they are now, but then there was a huge property crash,” he says. “Prices slumped by 65 per cent, almost overnight and they haven’t recovered. You can pick up a villa on the beach for £14,000.”

A particularly beautiful place to buy, he says, is Itamaracá, an island near Recife. “There are white sand beaches and it’s very undeveloped. Of course, everyone knows that Rio is something of a troublespot, but the northeast coast of Natal, from Recife to Fortaleza, is very attractive and you can pick up a good-quality property in a new development for as little as £20,000.”

James Price, head of Knight Frank’s international developments, says there is a growing appetite for Latin America as a whole, but particularly for Bahia in Brazil. He says: “Developers there are increasingly targeting European audiences. Argentina and Uruguay have established markets among European buyers but until now Brazil has lagged behind. We expect that will change dramatically in the next few years as the emerging market picks up momentum.”

The New York Times

February 4, 2007

Cultured Traveler | Buenos Aires

Making the Most of Those Long Argentine Nights

By MATT GROSS

VERY late one Wednesday night in November, Calle Balcarce was deserted. By day this street in San Telmo — the quintessential “old Buenos Aires” neighborhood — would have hummed with pedestrians enjoying the warmth of late spring, but now the stone and concrete buildings glowed lonely yellow under the street lamps. Even my destination, a club called X Vos, looked abandoned; only a pair of smokers killing time on the sidewalk hinted that anything might be happening inside.

Within the club's brick and black-painted walls, however, a free-for-all was getting under way. The D.J., Villa Diamante, was spinning hip-hop and reggaetón, video graphics swirled faintly on a wall (I caught images from “2001: A Space Odyssey”), and a hundred or so clubgoers in jeans, T-shirts and hoodies were downing cheap beers and whiskey nacional in preparation for the evening's “cumbia experimental,” an electronicized version of a type of folk music popular in the city's villas, or slums.

Soon, the real party — the weekly performance known as Zizek — began. A corn-rowed guy took the stage and, over the cumbia's ch-ch-ch rhythms, began spouting dancehall lyrics in Spanish, while behind him a boy of about 10 carefully strummed chords on a guitar about as long as he was tall. Suddenly a big dude grabbed the microphone and — how do I put this? — squawk-squealed into it for several minutes. The crowd surged every time a singer chanted the refrain “Cumbia-a-a!” No wonder Clarín, Argentina's largest newspaper, had nominated Zizek as one of the best parties of the year — it was awesome.

But Zizek — named for the Slovenian philosopher Slavoj Zizek, who is married to a young Argentine model and once taught at the University of Buenos Aires — was only the finale of a phenomenally busy but typical Wednesday in Argentina's capital.

At midnight, I'd been eating dinner — rich morcilla gnocchi flecked with crunchy Granny Smith apple — with fashion designers and artists at Casa Cruz, an ultrachic restaurant paneled in gleaming mahogany. A few hours earlier, there were cocktails poolside at the Faena Hotel + Universe, designed by Philippe Starck. I'd spent the afternoon gallery hopping, had an espresso at the contemporary Latin American art museum and met the writer Washington Cucurto, Argentina's answer to Dave Eggers, at the workshop where he transforms used cardboard into hand-painted book covers for his independent publishing house, Eloísa Cartonera. And somewhere in there, I'd found time for a quick nap at the enormous bilevel loft I'd rented in the fashionable Recoleta neighborhood.

If this sounds exhausting, it was. But it was also exhilarating, affordable (thanks to the lingering effects of Argentina's economic crisis five years ago) and accessible. In fact, the only difficulty I'd faced in all of this was deciding which of the night's dozens of events to forgo — in the end, I couldn't make it to a friend's party at El Diamante, a Mexican-kitsch tapas restaurant designed by the artist Sergio de Loof.

Such are the challenges vexing any visitor to today's Buenos Aires: electrotango or art opening, design festival or indie theater, a chichi martini and exquisite cut of grilled meat or a simple beer at a grimy bar (followed by an exquisite cut of grilled meat). But since the average Argentine evening extends into the dawn, there's often time — if you have the stamina — to do it all.

Still, any decision process must begin with a fundamental choice — where do you establish home base? For visitors in search of the next cool thing, two options present themselves, Puerto Madero and Palermo.

Puerto Madero, connected to downtown by a quartet of bridges, was once the city's cargo terminal, where trains from the countryside would arrive bearing grain, beef and wine for export. But for more than 20 years, the forces of urban renewal have been at work. Today the long, broad avenues of Puerto Madero bear only a few traces of the neighborhood's industrial past. The gantry cranes that once lifted containers onto ships now stand guard over antiseptic plazas like anime robots; residential skyscrapers front the boardwalk where street venders grill steak sandwiches (and sell them for 4 pesos, about $1.30 at 3.1 pesos to the U.S. dollar); the sign over one construction site boasts Cesar Pelli as its architect; and Los Molinos, a former granary, is expected to anchor a future arts district.

Puerto Madero is also home to many of the city's high-end hotels: a Hilton, a Sofitel and the Faena Hotel + Universe. (Alan Faena is behind much of the multimillion-dollar development in Puerto Madero, and has engaged Norman Foster to do another building.) Once a red-brick warehouse, the Faena is now one of the city's most opulent lodgings, with buttoned-leather sofas, gilt touches, drooping chandeliers and lots and lots of red: carpets, curtains, lampshades, wineglasses — even the crisp bangs fringing the forehead of the Faena's creative director, Ximena Caminos, were tinted crimson. About the only non-red object in sight was the white cowboy hat on the head of Mr. Faena himself.

And yet Puerto Madero, for all its ambitions and big-name architects, remains a bit underpopulated. There is little foot traffic and none of the sense of neighborhood that elsewhere produces great boutiques, funky cafes and top restaurants. Perhaps when all the construction — including a major revamping of the downtown area across the Puente de la Mujer— is complete, Puerto Madero will come into its own. Till then, Faena devotees will probably be taking a lot of 20-peso cab rides to Palermo.

Palermo is without doubt the hippest part of Buenos Aires. Once it was a quiet residential neighborhood whose narrow cobblestone streets were lined with trees and low Spanish-style homes. But in the mid-1990s, artists, designers, architects and film producers took advantage of its affordability to set up shop — a movement that has dramatically accelerated since the 2002 economic crisis. Today, it feels like every boutique is a former bakery, every hotel a former town house and every gallery a former garage. No writer is allowed to describe Palermo without comparing it to SoHo in Manhattan or deploying the adjective “trendy.” (There's even a blog, trendypalermoviejo.blogspot.com.)

Palermo boasts the city's highest concentration of boutique hotels, with what seems like one opening every month, including the Home Hotel, whose Scandinavian furniture and iPod connections enticed George W. Bush's twin daughters to check in to one of its 14 rooms and three suites in November.

But I didn't stay at any of these places. Instead, I turned to Apartmentsba.com, a rental agency with hundreds of apartments across Buenos Aires, and found an 11th-floor loft in Recoleta, a tony neighborhood midway between Palermo and Puerto Madero. For $600 a week, I had windows that stretched 16 feet to the ceiling, a big soft bed, glitch-free wireless Internet and even concierge services. Outside, glorious belle époque apartment buildings glittered in the warm sun, and jacaranda trees spread over the avenues, their fractal branches ending in inky lavender blooms.

Not too shabby — but still, I spent little time in Recoleta. Soon after my breakfast of medialunas (a type of Argentine croissant) and a cortado (espresso with a little milk) at the sunny cafe across the street, I'd catch a cab to Palermo, where I'd meet a friend for chocolate brioche at Mark's, then go strolling the neighborhood in search of architectural treasures, like an 1877 mansion with stained-glass windows hidden down an alley and supposedly owned by a telenovela star. In between, I could pop into galleries like El Borde, where the mysterious narrow-gauge rail tracks running through the big white space almost distracted me from Arturo Aguiar's lush photos of his artist friends (very much in the style of the Hong Kong filmmaker Wong Kar-wai, but maybe I'm just thinking of his Buenos Aires movie, “Happy Together”).

Though Palermo may sound very commercialized — “SoHo-ized” is the term preferred by some — it is at the same time fascinating to see how the neighborhood had reinvented itself in the five years since the crisis. Those rail tracks in El Borde, the word panaderia (bakery) carved in the stone above the window of the fashion boutique Emme, even the warm, clubby atmosphere inside the Nike store's crumbly edifice — all hinted at a past not too far removed, and suggested that Palermo had undergone a relatively organic transformation.

Still, this metamorphosis has had consequences. Real estate is no longer cheap, so artier denizens have moved elsewhere. Belleza y Felicidad, an eclectic art gallery that sells the hand-painted books of Eloísa Cartonera, is in Almagro, a middle-class neighborhood south of Palermo whose cachet increases as it blends at its edges with other neighborhoods like Boedo — home of the up-and-coming neorealist theater scene — and Once, where the Ciudad Cultural Konex theater plays host to modern dance epics.

To find Appetite, an avant-garde gallery that everyone I met recommended, I had to return to one of San Telmo's less atmospheric blocks. Pop-punk exuberance is Appetite's stock in trade, its walls (and floors) are covered in a profusion of styles, from Ariel Cusnir's paintings of idealized tropical islands and Anabella Papa's witty paintings of beautiful, casual violence (schoolboys brawling, a man attacked by a wolf) to a row of blue plastic shopping bags and a paint can frozen in mid-spill atop a table.

Visiting these lesser-known corners takes a bit of effort. Taxis, which at first blush seem so fast and cheap, get caught in unexpected waves of traffic, and the Subte, or subway, so efficient at whisking people to and from the city center, is worthless if you need to go across town. Walking, while a great way to take in the architecture and vibrant street life, can tire you out, making late-night festivities a literal yawn. And if, like me, you don't speak Spanish well, it can seem pointlessly strenuous to wander outside the comfort zone of Palermo.

The rewards, however, are worth the fatigue. At Appetite, I was led around the corner to a warehouse where Mr. Cusnir and the fashion label Maison Trash were rehearsing a production of Mr. Cusnir's art — complete with sand, palm tree and big model helicopter. And in the Pan y Arte restaurant in Boedo, I ate sublime Mendoza-style cuisine — sweet-corn empanadas, lush calabaza casserole and excellent Mendoza malbec wine — in a room full of actors and directors. In each case, I felt as if I'd begun to penetrate that tricky tourist-local barrier.

What's more, I got a sense of the city's size and interconnectedness — it was more than just a few neighborhoods I'd seen in glossy magazines and coffee table books. Soon, it was unsurprising to learn, for example, that the choreographer with the lauded aerial-tango show at Konex was married to the architect who was transforming the downtown post office into a theater.

But whomever I met, wherever I went, I would always return — without much regret — to Palermo, where I would find a whiskey nacional waiting for me at Mundo Bizarro, a Los Angeles-style diner/bar, or a warm ceviche at the quasi-Japanese Dominga. And my new friends would be there, too, sipping Pink Panther cocktails under the arcing wood ceiling of Bar 6 or eating French-ish salads at the pink-painted picnic tables of Oui Oui. Even Zizek made it to Palermo; in December, the party took up residence at Niceto, one of the city's slickest clubs.

Always, though, there would come a time in those Palermo nights when I would suddenly catch myself with the realization that I'd missed Juana Chang's indie rock show or Codigo Pais, a festival of “creative tendencies” that included D.J. sets, art films, experimental technology and a tantalizing “espacio erótico.” But then I would remember: There was always tomorrow night.

VISITOR INFORMATION

GALLERIES AND MUSEUMS

El Borde, Uriarte 1356; (54-11) 4777-4573; www.sitearte.com.

Belleza y Felicidad, Acuña de Figueroa 900; (54-11) 4867-0073; www.bellezayfelicidad.com.ar.

Appetite, Chacabuco 551; (54-9-11) 6112-9975; www.appetite.com.ar.

Museo de Arte Latinoamericano de Buenos Aires, Avenida Figueroa Alcorta 3415; (54-11) 4808-6500; www.malba.org.ar.

RESTAURANTS AND BARS

Casa Cruz, Uriarte 1658; (54-11) 4833-1112; www.casa-cruz.com. Dinner for two with wine, 200 pesos (about $65 at 3.1 pesos to the dollar).

Mundo Bizarro, Serrano 1222; (54-11) 4773-1967.

Dominga, Honduras 5618; (54-11) 4771-4443. Dinner for two with wine, 120 pesos.

Bar 6, Armenia 1676; (54-11) 4833-6807.

Oui Oui, Nicaragua 6068; (54-11) 4778-9614; www.ouioui.com.ar. Brunch for two, 40 pesos.

Pan y Arte, Boedo 878; (54-11) 4957-6702. Dinner for two with wine, 100 pesos.

El Diamante, Malabia 1688; (54-11) 4831-5735. Dinner for two with wine, 100 pesos.

CLUBS

Niceto, Coronel Niceto Vega 5510; (54-11) 4779-9396; www.nicetoclub.com. Cover charge: free to 25 pesos (Zizek is 10).

X Vos, Balcarce 563; (54-11) 4342-0703; www.xvosbsas.com.ar. Cover charge: 35 to 50 pesos.

The Real Estate Boom in Argentina

Wharton School of Business

In every neighborhood in Buenos Aires, Argentina, dozens of buildings that are under construction stand out against the horizon. This phenomenon began shortly after the economic crisis started four years ago. According to a report by UADE, the Argentine management school, Argentina has enjoyed 14 consecutive quarters of continuous and meaningful growth in construction activity. During the first of 2006, growth reached 21.2%.

“The macroeconomic crisis of 2002 released pent-up demand for construction, after the fact,” says Ricardo Theller, a researcher and professor at UADE’s Center for Advanced Studies (CEAV). Theller adds, “Some of the factors that led to the current resurgence are low interest rates, [high] liquidity, exchange-rate stability from 2004 to 2006, the turnaround in public-sector investment and the strong pace of macroeconomic growth.”

When the government of Argentina defaulted on its debt payments in the summer of 2002, it not only aggravated the social and economic situation but also broke the banking system and, with it, the savings of ordinary citizens. According to Luis Martínez de Virgilio, manager of CB Richard Ellis, the global real-estate service company, “When people were left without a reliable alternative to depositing their money in banks, they turned their investment toward the construction sector.” Martínez outlines the other factors that contributed to rapid growth: “Relatively low prices for real estate, and the balance between the construction costs and sales prices, which yields positive returns for real estate developers. Add all that up and there is a real opportunity in the construction sector.” The price of a square meter in Argentina currently varies between 750 euros and 2,300 euros.

There seems to be no end to this phenomenon, known as a real estate boom or bubble. Some specialists believe that it is here to stay. “It is not a bubble because we are dealing with growth that is real. The capital they are using for construction is real, and there is practically no bank financing [of construction projects],” says Gustavo Kancyper. He is an architect who manages Construcciones Seweco, a company that constructs buildings in Palermo Hollywood, one of the neighborhoods popular with investors.

Virgilio agrees. “I don’t think that this is a bubble because it does not have a financial effect. What you’re talking about here are private investors who know how to anticipate good opportunities in the market, demand [trends], and so forth. We expect growth to continue. Everything points in that direction, although we know that some phenomena are cyclical in nature.”

For his part, Theller says that we have reached a stage in the typical real estate cycle where “demand exerts upward pressure on prices and this pressure stimulates growth in supply, in turn.” Nevertheless, Theller recognizes some fundamental characteristics of the current growth. These include “the improved quality of the average construction project (which makes it more expensive); the relatively high growth in the population segment that is old enough to get married and become independent (which exerts greater pressure on demand); the fact that the economy has moved out of a deep recession that was largely unprecedented; and a positive wealth effect that has several different sources.” However, Theller warns, “After those various stimuli have been exhausted, both prices and volume will tend to align with the ‘fundamentals’ of the economy, and that will mean that growth rates decelerate.”

In August 2006, the Buenos Aires bureau of records recorded 5,583 deeds involved in real estate purchases worth a total of about 240 million euros. That figure was 1.9% higher than for the same month in 2005.

Buenos Aires, known as the Queen of the Plata [River] and the Paris of South America, is not the only place that is attracting attention from investors. The interior of the country is also experiencing feverish construction, especially in the larger provincial cities that have enjoyed growth in the industrial sector, and in agriculture and tourism. The UADE report shows 19.8% growth in the volume of square meters now under construction in the 42 largest cities of the country.

Winners and Losers

It is not only Argentine savers and wealthy Argentines who are involved. When it comes to investing in property, foreign buyers are also playing a major role, including other Latin Americans, Americans, and Europeans.

In the opinion of Gustavo Kancyper, “The northern hemisphere [Europe and North America] is very closed and quite saturated in many business sectors. Buenos Aires remains one of the most attractive cities in the world, and it has a future.” For his part, Theller believes that “the international situation offers high liquidity, and interest rates in Argentina are relatively low. The country has been stabilized, and forecasts call for growth rates of more than 6% a year.” Virgilio adds that while the price of a square meter in Argentina “is on a par with Latin America, it continues to be cheap compared with Europe and the United States.”

One of the areas of greatest interest for foreign investors is Puerto Madero, a recently rebuilt area neighborhood that is near the city’s financial center. Its impressive office buildings, equipped with swimming pools, gymnasiums and even restaurants, sell for more than 2,000 euros per square meter, making them popular among business executives, diplomats and others who can afford them.

Nevertheless, a significant segment of Argentina’s working population is still unable to acquire property. The real estate boom has left behind these renters, who find it hard to get loans. As a result, the government has launched a plan for low interest rates and loans of more than 20 years. To be eligible, renters must show that they are able to pay.

Theller says that “although not everyone can qualify for this program, an additional segment of medium-income people will be able to profit from acquiring their own housing; it depends on their previous level of savings and income.” Moreover, “the plan promotes relief of the value-added tax when the funds are used for constructing leased and rental properties.”

At the moment, however, the good intentions of the government of Nestor Kirchner have yet to bear fruit. “The new plan is a good thing but it is not enough,” says Virgilio, who is worried. “People had expected that they could go talk with the banks, and they are disillusioned because the price of housing continues to be very high compared with their incomes. It is very hard to offer interest rates that are below the inflation rate, even for the official banks.” Rates for new loans are about 9.5%, while the annual inflation rate exceeds 10%.

For the time being, the [real estate] market continues to have positive expectations. The latest data collected by INDEC (the National Institute of Statistics and Census) in July showed that private real-estate developers were optimistic that construction activity would grow by more than 19% during the remainder of 2006. For their part, companies involved in public works were estimating almost 15% growth.

According to Ecolatina, a consulting firm, next year will bring “a renewal of growth in new niches for real-estate investment and a growing contribution from public sector projects.” Overall, Ecolatina forecasts growth of 15% for 2007. The only thing worrying experts is incipient growth in construction costs. The UADE report reveals that during the first half of 2006 “construction costs registered an overall increase of 18.6% compared with the first half of last year. The rise in general construction costs included 12.7% growth in the cost of construction materials, which represent 46% of the overall index. Labor costs, which constitute 45% of overall construction costs, rose by 28.8% during that period.

EXAME - Brazil's Most Respected Financial Publication

February 2007

By: Tatiana Gianini

One of the classic definitions for this music, born in the alleys and taverns of the Argentine capital, says that the tango “is a sentiment which is to be danced” The birth place of this rhythm became a synonym for the music and the soul of the ‘porteños’ . The city has lived a good part of the last few years wrapped in the same atmosphere of tragedy and sadness which characterized the great songs of Carlos Gardel. The elegant, cosmopolitan and intense city suffered as no other the impact of the recession which culminated in the country’s going into default, at the end of 2001. Visitors decreased, the capital was impoverished, and its streets became the scenario of violent protests.

For the relief of Argentines, the present panorama is very different today. Improvement of the country’s economy --thanks to a BPI which rises at a rate of 9%--, wiped out that heavy cloud of melancholy. Even though expansion is still –to a great extent-- the making up of lost time in the course of the last few years, it is true that Buenos Aires begins to recover that aura which made people think of it by the name of "the Paris of Latin America".

The tourist industry reflects exactly this good moment, by unifying a series of positive results. All along the past year the city received 2 million tourists –the best mark since 2001 (see table below) -- while Rio de Janeiro, the Brazilian capital with the highest rate of tourists, receives 1.6 million visitors each year. The ‘coming back’ of a great number of tourists whetted the appetite of investors. According to a recent study prepared by the consulting firm Ecolatina, investors on hotels and restaurants in Argentina climbed in the last two years from 323 million dollars to more than 600 million dollars. Last year 76 hotels were inaugurated in the country, and another 200 are now being built –most of them in the capital. There are attractions for all tastes, as in the case of Axel Hotel Buenos Aires, in the San Telmo area. On the initiative of a Spanish group, which invested 3,5 million dollars in this project, the hotel intends to be the first five-star hotel in Latin America, targeting a gay clientele. Its inauguration is expected to be in July.

Apart from the places traditionally sought by visitors (such as Recoleta and San Telmo), new areas of the city moved into the tourist circuit. One of them is Palermo, with several parks, bars and design shops, among other attractions. Another outstanding site is Puerto Madero, an old and decaying port area of Rio de la Plata, which became an example of renewal at the end of the nineties and continues to offer novelties. Right now they are investing 300 million dollars to finish the Faena Art District, a commercial, residential and cultural complex. The first stage of this project was completed in 2004, with the opening of three residential spaces and inauguration of the Faena Hotel + Universe. With the name of the famed French designer Philippe Starck, this site has won several international awards in architecture and tourism; among these, one given by the English review Wallpaper and the American Condé Nast Traveller. The rest of the Faena Art District Project will be ready in three years.

In view of this tourist interest there has been a significant increase in the value of real estate in these areas. In the main suburbs of Argentina’s capital, the price of a square meter climbed over 50% in the last four years – while in 2006 alone, the value of real estate went up 20%. “There are many Americans and British investing in real estate in the capital since prices here are still much lower", says Michael Koh