The farm land,
a protection of capital |
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The value of Argentinean farm land has grown this year by 20 % in comparison to last year. Even though the agricultural rent has fallen the Argentinean farm land constitutes a secure mechanism to preserve capital. This is observed by a trend of local and international investors who are demanding more and more hectares of land.
Five hundred dollars, that is the amount of the average increase in value of each productive hectare of Argentinean farm land this year. This situation accounts to an economic phenomenon hard to explain, agricultural profitability has fallen dramatically in comparison to 2002 while the main asset of agriculture, the land, has moved in an opposite path.
This remarkable revaluation has no exceptions: crown fields, wheat fields as well as livestock fields rise in value and demand.
According to records of the Argentinean Farm Land Company, one of he real state companies specialized in this field, in every single case the net value of farm lands exceeds those before the 2002 currency devaluation.
Any agricultural farm land calls out 8000 per hectare while the average current price for the last decade was 4000 per hectare The actual picture of the markets shows that lot of people are interested in buying the scarce hectares that are left for sale. There is, indeed, a very narrow supply, and what is more, it has not appeared any other alternatives to protect capital.
Financial assets are not as certain as land in Argentina, people might keep 50 thousand pesos there, but no 3 or 4 millions.
Land is therefore is secure investment since those who purchase land search to things: rent but also a guaranty to preserve capital. It is clear that people who buy farm land more than benefit from agriculture or livestock care about preserving their capital.
Frenkel Santillan, president of Bullrich Fields, has stressed that: “there is a great discredit around the Argentinean financial system, not only in Argentina but elsewhere. The financial profit is even bellow the US inflation. In Argentina there are not long term business perspectives, the picture is not clear for other segments such as industry and mining.
Therefore, those who posses money invest in the most secure asset: land farm”.
Safety, that is what investors care when purchasing farm land hectares.
Francisco García Fiorucci
University graduate in Economics
francisco@llaullincampos.com
January, 2006
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| What are the perspectives for the real state sector for 2006? |
According to the official statistics of the Notary Association (“Colegio de Escribanos”) of Buenos Aires, the amount of operations for January of this year registered an increase of 23.25% in comparison to last year’s same month. Additionally, the effective signed operations were 63% more than those of January 2005. The Notary Association states that a total of 4.272 were registered in January 2006 while in January 2005 the amount accounted to 3.466. The turnover negotiated in January 2006 was the highest amount within the last eight years. Besides that, the amount of money invested achieved also an historical level after the devaluation of 2002.
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| The farm land, a protection of capital |
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The value of Argentinean farm land has grown this year by 20 % in comparison to last year. Even though the agricultural rent has fallen the Argen-tinean farm land constitutes a secure mechanism to preserve capital. This is observed by a trend of local and international investors who are demanding more and more hectares of land.
Five hundred dollars, that is the amount of the average increase in value of each productive hectare of Argentinean farm land this year. Go to Article>> |
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