Investment Opportunity: The Real Estate Market in Argentina in 2024

In 2023, the Argentine real estate market reached historically low prices, offering a unique opportunity for buyers and investors. This phenomenon was due to several negative factors that deeply affected the sector, and from J&J, we will review them to better understand the current market behavior in 2024.

Reasons for the “All Time Low” in 2023

In recent years, Argentina has faced a series of economic and political challenges that directly impacted the real estate market. The main factors include:

• Economic Crisis: The Argentine economy experienced a high inflation rate and constant currency depreciation, thus eroding the purchasing power of the general public and discouraging investment in real estate.
• Unfavorable Regulatory Policies: The controversial and famous Rental Law or Law 27.551 (enacted in June 2020) generated uncertainty and disincentivized the supply of rentals and the purchase of properties intended for rental in general, increasing the supply of properties for sale in the market. The average annual rental income was around 4%.

• Credit Shortage: The lack of credit in recent years limited the purchasing capacity of potential homeowners, reducing the demand for housing by end users.

Market Trends in 2024

Currently, the real estate market in Argentina is showing signs of recovery, suggesting that opportunities still exist for investors who wish to enter the market. According to recent data from Reporte Inmobiliario and the Index of Universidad del CEMA and RE/MAX Argentina:

In April 2024, the total number of real estate purchase deeds in the City of Buenos Aires increased by 32.2% compared to the same month of the previous year, reaching a total of 3,636 registrations. Additionally, the total amount of transactions carried out rose by 345.4%, reaching $279.237 million.

The Real M2 Index for April 2024 increased by 2.14% compared to the previous month, reflecting an appreciation in real estate market prices. Compared to the same month last year, the general m2 sale price of used apartments with 1 to 3 rooms in the city of Buenos Aires also appreciated by 10.26%.

The price per m2 in the sale of studio apartments was recorded at $1969, while for 2 and 3 room units, it was $1908 and $1841, respectively.

Positive Factors Driving Current Growth

• Change in Public Policies: Although the Argentine economy faces challenges such as high inflation and fiscal uncertainty, a relative policy shift has increased investor confidence, such as the repeal of the Rental Law.

• Reactivation of Mortgage Credit: With the decline in interest rates, banks have shifted their focus to mortgage loans, and the supply has grown sharply in recent months.

Conclusion

In summary, the Argentine real estate market currently offers a window of opportunity for investors looking to benefit from prices recovering from their historic low in 2023. Although economic and political challenges persist, stabilization and growing demand indicate a more encouraging outlook for the coming years.

If you are considering investing in properties in Argentina, now is a good time to evaluate your options and make informed decisions with the help of J&J Group.