By LOUISE CARR, Associate Editor and Featured Columnist
Argentina is on sale again. Now that the local currency has fallen to record low value against the dollar and the euro, opportunistic real estate investors are eyeing Argentine real estate.
After nearly 10 years of price hikes, excellent buys are on the table once more. But there’s just one problem – tight government controls mean transactions in dollars are difficult.
With no shortage of spacious, light and airy apartments in both historic and mega-modern blocks, Buenos Aires offers much for the property shopper to get excited about.
A one-bedroom modern apartment with balcony overlooking a leafy plaza and shared use of a rooftop pool for $100,000? Check. Five bedrooms riding high above Palermo Zoo for $600,000? Check.
But how easy is it for a foreigner to buy an apartment like this in the Argentine capital? Can you get a mortgage, or do you need to travel with a suitcase of dollars?
The Dollar Debacle
Argentines and foreigners alike purchase property in US dollars, and have done so for decades.
But President Cristina Fernández de Kirchner put a strict limit on access to the currency in 2012 in a bid to stop dollars leaving the country.
If you don’t already have US dollars when you enter Argentina you will find it almost impossible to buy them within the country.
The "dolar blue" – the black market dollar – trades at almost double the official rate, and is practically the only means of buying dollars but it’s illegal. Many property transactions have been put on indefinite hold because the buyer ran out of dollars. (Read more about the many types of Argentine peso and how they compare to dollar values.)
Money Talks (and Cash Shouts)
Even Argentines have problems securing a mortgage for property so it goes without saying that foreigners will find it impossible to buy using this method.
Wiring enough money for a property transaction from a US bank to an Argentine bank will take the better part of a year when you have to work with restrictions on the amount allowed to be sent per month and the need to fill in paperwork for every transaction that is recognized and countersigned by a notary public.
You can make the transaction between two overseas bank accounts – for this, the seller will need a bank account in the US. But for the simplest solution you need to bring cash – lots of it.
Fortunately, the restrictions related to dollars mainly apply to taking the currency out of the country. Bringing it in is less problematic. You can take any amount of US dollars into Argentina but you have to declare any amount over USD $10,000.
Searching for Property
A number of sites on the internet show property advertised by private sellers, including http://www.mercadolibre.com.ar/inmuebles/ and http://www.olx.com.ar/.
There are also a number of sites run by agents that display a large number of apartments listed by area and price – check out http://www.zonaprop.com.ar/ and http://www.inmueblesenbaires.com.ar/ for a start, or search for inmuebles en Buenos Aires. In fact, most of the searching can be completed on the internet. Properties are also advertised in the newspaper, particularly in Clarín.
The adverts are pretty self-explanatory when you’ve got a rudimentary level of Spanish.
One thing to remember when looking at the number of ambientes (rooms) is the bathroom is not counted, so 4 ambientes may include two bedrooms, a living room (living), a dining room (comedor), and a bathroom (baño) (five rooms in total.)
When buying in a modern apartment block you also need to consider whether there are shared amenities including a pool (piscina or pileta) gym, sauna, or solarium.
Most apartments will have a separate parking space (cochera) – covered or open – but it will normally be sold separately and may or may not be on the property itself.
Parking is difficult and expensive in Buenos Aires and if you have a car you need a cochera close to your apartment.
When the ad says "lavadero", it doesn’t normally mean an actual laundry or laundry room but a space for your own machine which is located outside the apartment.
Note also the expenses (expensas) payable for the upkeep and maintenance of the building, usually paid every month in pesos.
Expenses are often calculated separately for the parking space and the separate laundry space, if there is one.
Which areas should you look at? Recoleta and the various neighborhoods in Palermo (Palermo Hollywood, Palermo Soho etc.) are the barrios that give Buenos Aires the moniker “Paris of the South”.
Here you’ll find a variety of new apartments, older apartments in historic buildings, duplexes and, less commonly, houses. These neighborhoods are also the most popular with tourists, meaning you will find no shortage of visitors to rent your pad.
Navigating the Buying Process
Once you’ve located your dream home or rental investment, you sign a purchase contract and typically put down 30 percent of the value.
A notary public carries out a title check and once you pay the balance, the apartment is yours. Figure for a variety of taxes on the transaction including a 1.8 percent federal tax on the buyer and the seller, and 1% to 2% in notary fees, paid by you the buyer. If you’re using an agent or broker then expect to pay around 2 to 5 percent of the sales price.
Buying an apartment in Buenos Aires is an attractive dream for many investors and those looking for an escape-pad in this vibrant and exciting city.
If you have cash then the dream could become a reality – just don’t count on being able to make a purchase without those dollars in your pocket.