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Argentina Real Estate Report Q1 2012
Business Monitor International, Jan 2012, Pages: 52
Business Monitor International's Argentina Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Argentina's Real Estate industry.
The most prevalent development in Argentina’s overall real estate market in recent months has been the restriction that the government placed on the purchase of US dollars on October 31 2011. In the last month, activity has stalled as companies –buyers and sellers – wait to see what the long-term effect of these restrictions will be. There seems to be a pessimistic view among developers in light of the news, as they believe the effect will be detrimental to the real estate and construction industries.
Construction contributes around 5% of Argentina's GDP, a percentage that is set to increase only marginally in future. Any long-term effect on construction from the currency purchasing restrictions could in time hit the wider economy, to which BMI has already presented downside risks in 2012. Prior to this news the overall real estate market outlook was fairly clear – in 2011 there has been some stabilisation of yields and rents, and there were new developments under way, particularly of residential space.
Key Opportunities In The Real Estate Market:
- Argentina’s healthy economy supports infrastructure projects and encourages business activity.
- Prior to the government’s announcement, Argentina’s national statistics agency recorded that October’s construction index was up 6.6% year-on-year and that the industry had been booming so far in 2011. If the stall in the market is a short-term consequence, this prior period of upbeat activity could hold up the industry.
- Tremendous commercial activity in Cordoba has resulted in real estate prices increasing, a trend which is set to continue.
Key Risks To The Real Estate Market:
- There are several downside risks to BMI’s GDP growth forecast for 2012.
- Argentina’s construction industry has faced high costs through 2011 and it has affected market players’ profitability.
- The government’s US dollar purchasing restrictions could affect all the potential opportunities in the market, as players stall their activities to see what the outcome of the government’s decision will be.
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