Making the move to Latin America, articulo sobre Real Estate en Argentina, The Independent, April 2009
Standing in the heart Buenos Aires’ well-heeled Recoleta district, its streets lined with grand mansions and dotted with jacaranda-filled parks, it’s not difficult to see why the Argentine capital, is referred to as the “Paris of the South”.
While the notion of owning property in Argentina may seem like a crazy idea to the average Brit, an increasing number are boarding the direct 15-hour flight from London, tempted by a combination of spectacular scenery, a cheaper standard of living and rises in property values.
For some, Argentina’s crippling economic crisis of 2001 may still be a recent memory, but for those willing to take the plunge into the Argentine market, the financial rewards are promising. Although growth has recently slowed due to the international downturn, in the past two years, property prices have risen around 15 to 20 per cent per annum in certain parts of Buenos Aires.
Top properties in sought-after neighbourhoods cost about one tenth of the equivalent in London. Most prospective purchasers zone in on two or three of the city’s 47 districts or “barrios” like the European-style Recoleta and Palermo with its atmospheric blend of cobblestone streets and colonial-style houses.
Given Argentina’s economic and political woes, it still makes sense for caution to be exercised and buyers need to do their homework.
Buying property in Argentina is a relatively straightforward process – there are no restrictions on foreigners and no capital gains tax, but purchasers do need a tax ID, acquired with the help of a local lawyer.
In 2004 Mary Richardson and her husband put their cash on the table for a large apartment in Recoleta, one of the city’s most chi-chi districts. “We fell in love with Buenos Aires and there is no competition in terms of what you can buy here compared to Europe,” says Richardson. “Buenos Aires is an exciting place to live and the possibilities for exploring the country are endless. There are pitfalls though – crime and muggings are common, and inflation is on the rise and bureaucracy takes forever. But our high standard of living comes at a much lower cost than at home,” she says.
The majority of prospective purchasers won’t have the time it takes to trawl countless estate agents or the language skills to confidently seal the deal. There are now a number of agencies willing to act as go-betweens either finding properties for clients or simply negotiating a more realistic price. BA Apartments is a consultancy founded by Michael Koh, that makes sure the buying process runs smoothly from start to finish, for which he charges a flat fee of $4,500 (£3,080) per transaction.
Koh reckons that almost 20 per cent of his business comes from British investors, although he is still surprised at some buyers’ nonchalant approach. “Too many foreigners only look at the price tag and it seems insanely cheap for them. For some reason they throw common sense out the window just because the prices are much cheaper. The property market in Argentina is unregulated so there is a high scam factor – you need to take time with the purchase and use trustworthy people,” he says. Felix Keckeis, the managing director of Maison Buenos Aires, believes there is much potential for those willing to venture outside the city, where a number of new developments offer good long-term prospects. This sentiment is echoed by Inmobiliaria Bullrich’s, Carina Bendeck, who cites developments beyond the city, in suburbs like the wealthy enclave of Hurlingham and other parts of the country like the vine-draped Mendoza.
During the 19th and 20th centuries the large farms that dot the pancake-flat pampas surrounding Buenos Aires were one of the country’s most important sources of wealth. The development at the Estancia Villa Maria is a vestige of these boom times repackaged for more modern dwellers. Tucked down an imposing driveway of towering eucalyptus trees its a stately mansion that looks more Surrey than South America.
Surrounding the main house are 800 lots varying in size from 2,000 sq m to 1.3 hectares costing $60 per square metre. Purchasers will need to pay an additional four per cent on the total price of the lot in fees and taxes. When finished, there will be a polo club, 18-hole golf course, equestrian centres, clubhouses and a spa. Its location an hour and a half from the city and 45 minutes from the international airport means that properties could offer good rental returns, as country clubs are an extremely popular weekend retreats for both Argentines and those from further afield like the sizeable polo-playing fraternity.
So, for a new wave of British arrivals armed with knowledge and plenty of cash, Argentina might prove one journey worth making.
Argentina: Buyer’s guide
* Return fares to Buenos Aires from London Heathrow typically cost around £950 return with British Airways (0844 493 0787; www.ba.com ).
* Most property transactions are conducted in cash, US dollars, which involves handing over the money on the day of purchase.
* Tax evasion is common in Argentina and many sellers often insist that a lower purchase price is recorded on the title deed.
* New developments often offer the chance to buy off plan and pay in instalments, but as inflation is on the rise, any increased construction costs will be passed on.
* Buenos Aires real estate has no official regulation, so it’s crucial to seek advice from an intermediary or someone familiar with the business on the ground.