Land and Freedom

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International Homes Magazine  - Leading Property Investment Magazine in the UK  -  Vol. 13 No. 1  February 2006 

By: Michael Gunn

 

Is Spain looking just too crowded and familiar?  Latin America has the ideal alternative for those who’ve honed their Spanish but hunger for more dramatic surroundings, greater adventure and much cheaper property.  Take a bow Argentina – the continent’s second largest territory with plenty of land to spare.

“Argentina isn’t some small Caribbean island or tiny Central American tax haven,” says David Cummings of Tierra Estates.  “It’s a proper country with vast opportunities for exploring.  There are tropics at one end, glaciers at the other, sea on one side, soaring mountains the other.”  Even the most cursory glance at a map bears him out – from the subtropical borders with Bolivia and Paraguay, down the western spine of the Andes range, all the way to the Patagonian steppes, this 5,000-km stretch of land promises a lifetime of exploration. 

Also, unlike some of its South American neighbors, Argentina is a safe and friendly destination that can deliver a first world lifestyle, but at third world prices.  Such a climate is a direct result of the country’s 2001 economic plunge – when Argentina defaulted on massive international debt and saw the peso lose 75 per cent of its value in a single day.  Five years on and things have definitely improved.  The economy is back on track, foreign investment has returned and unemployment has leveled at 12 per cent – the World Bank predicts the country will remain economically stable for the next 20 years.   Tourism is set to play a major role too with a target of 10 million annual visitors by 2010.   Added to that, low cost airlines have resumed flights to Buenos Aires and firms such as Air Milan and Continental are restarting direct routes.  For now, however, living costs are still very low.  “Investors can buy wonderful properties with land for very little and without the burden of a mortgage,” says Dan Hathway of Andino Property.  The state of affairs has brought burgeoning numbers of overseas visitors keen to join Argentina’s first wave of property pioneers.

 

Air and graces   

First stop is Buenos Aires, the so-called ‘Paris of Latin America’, where old world elegance still flourishes at the heart of one of the continent’s largest cosmopolitan centres.  With a population of 2.7 million divided between 47 districts (or barrios) modern BA is a fantastically varied beast.  The architecture showcases the country’s resplendent past in the Metropolitan Cathedral and Teatro Colon, the world’s largest opera house, while the enterprising future finds it place in the redevelopments of Palermo and Puerto Madero.

Currently the biggest attraction is that property is extremely cheap for those armed with foreign currency.  Values are pegged to the US dollar and the real estate sector accounted for 60 per cent of all investment in Argentina last year.   By some estimates, half of luxury apartment purchases in Buenos Aires were by foreigners – unsurprising when you consider what a relatively small sum can buy.  One-bed apartments can cost less than $50,000 (£ 28,250), a stylish two-bed place from $80,000 (£45,205).

That’s set to change in the near future.  “Real estate has risen dramatically since the 2001-2002 devaluation,” says Michael Koh of ApartmentsBA.com, a company specializing in redevelopments and high-end rentals.  “Argentina’s economy has rebounded from the financial crises with three straight years of nine per cent growth – one of the highest rates in the world.”  In some areas of the city, property prices have risen by 30 per cent in the last year and construction figures have soared too.  “The people buying aren’t speculators,” he explains.  “Mortgages are almost non-existent here so buyers are true investors.  Purchases are 100 per cent cash for the most part, literally paid with dollars over the table.”

Recoleta in Barrio Norte is the very top rung of the property ladder.  “It’s the Mayfair of Buenos Aires – stylish, chic and very safe,” says Mr. Cummings.  “An address here is considered the right one to have.  It’s true to say it has a certain snob appeal.”  Central to practically everywhere in BA, it boasts grand European architecture, wide boulevards and the city’s finest restaurants and designer shops.  Prices range between $1,500 and $2,500 (£850 - £1,420) per sq. metre depending on the age of the building.

Also of interest is Palermo – BA’s Notting Hill or Chelsea and the haunt of Argentina’s fashionistas.  Here you’ll find the parks, lakes and the racecourses that draw the city’s rich clientele and not a few moneyed ex-pats – Prince Harry has been spotted here.  “It’s got a great location and it’s very trendy these days,” says Mr. Cummings.  “Although you’ve got to know where to buy, if you fancy property developing in BA then both Palermo Viejo and Palermo Hollywood are sure-fire hits.”  Prices range from $1,000 to $1,600 (£570 - £900) per square metre.

Perhaps the freshest opportunities are to be found in Puerto Madero, the city’s former docklands.  Like its London namesake, this industrial area lay derelict for decades when it proved too small to keep up with the country’s busy shipping trade.  Following its resurrection in the 1990s, redevelopment continues apace with cranes crowding the skyline.  Prices are already at a premium at around $2,200 - $3,000 (£1,240 - £1,700) per sq. metre and only a few sites are left for development.

    

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