| 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. It is clear that the expanding activity has also brought an increase in prices. For instance, the prices of Buenos Aire´s properties grew 3.5% in average in comparison to last year. Moreover, the increase in prices of flats reached approximately from 10 to 20%.
Rural properties have followed the same trend since they prices grew in average from 15 to 25%. In fact, many real state advisers believe that prices have not yet achieved their top. All this figures show that the growing tendency of activity is immersed into a general recovery of Argentine Economy. A testimony of that are the 71.074 contracts signed within 2005.
During 2005 the amount of purchasing documents almost doubled those of December of 2001. What is more, theses increases are not related to any mortgage loan policy from banks such as that implemented in 1998, a year where it was very easy to obtain a bank loan with a low rate interest: in 1998 a total of 108.000 contracts were signed. According to José Rozados, head manager of Reporte Inmbobiliario, if we compare 1998 to last year´s situation we can be very optimistic about the present since 90% of operations of 2005 were sealed in cash. In that vein, offices of court clerk are a fine thermometer of economic reality for purchasing operations, mortgage loans, and the creation of associations have to be documented before public notaries. This last aspect converts the notary sector into a privileged agent when it comes to “perceive” the signs of the economy. Precisely, the data provided by the Notary Association of the city of Buenos Aires show that the amount of purchasing operations of real state properties are growing every month. The same can be said about the formation of business association aimed at building construction, private neighborhoods, as well as investing societies oriented towards rural assets, and of course, new associations.
This cycle initiated in 2004, then consolidated in 2005, will certainly maintain its path during 2006. There is no better proof than the witness of economic growth from 2005 to 2004. For example, general construction grew 58% along with the creation of 50.000 job opportunities, and an average of 6.500 more title deeds.
However, as real state properties have recovered the values of 2000 it seems that demand profile has also changed. At the present, buyers of land regard availability and proximity to roads and access, electricity (not only lightening but tv cable, water extraction, and other services), comfortable houses as well as appropriate facilities. This trend explains why in some rural areas prices have oscillated approximately 30% within the last two years.
It is clear that real states constitute a valuable asset that serve as protection against macroeconomic instability and high rates of inflation. “Real state properties are the best shelter for savings and protection”.
Francisco García Fiorucci
University graduate in Economics
francisco@llaullincampos.com
April, 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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