Argentina’s housing market hit by unorthodox economics
This year has been rough on Argentina’s property market, after a recovery from the global downturn during 2010 and 2011. The number of real estate transactions in Buenos Aires fell 46% to 6,315 in July 2012, according to the Colegio de Escribanos de la Provincia de Buenos Aires (Buenos Aires Notary College). For residential transactions, Reporte Inmobiliario’s Buenos Aires database shows a 15% drop in sales in Buenos Aires during the year to May 2012.
Why? Newly imposed currency controls have frozen the market. From October 31, 2011, President Cristina Fernandez de Kirchner restricted the acquisition of US dollars, the commonly used currency for property sales in Argentina. The federal tax agency’s authorization is now required before making any foreign exchange purchase. The implementation of these tight policy measures, as well as the slowing economy (expected GDP growth is 4.2% this year) has brought a general decline in real estate activity.
