Buenos Aires properties level off after steep rises
Is it time for a new “sirloin steak index”? According to Paul Reynolds, owner of Reynolds Propiedades, an estate agency in Buenos Aires, the price of a prime steak in restaurants in the Argentine capital has a credible link with the pulling power of property for many overseas buyers.
“In 2002 and 2003, after Argentina’s financial crash, a bife de chorizo [sirloin steak] cost $5 and Buenos Aires was full of foreigners snapping up apartments for as little as $800 per sq metre in Recoleta, one of the best neighbourhoods,” he says.
It’s easy to fall for Recoleta. This graceful, centrally located district has some of the city’s most handsome apartment buildings, many decorated with immaculate wrought iron. The same apartments that were selling for $1,600 per sq metre in 2001, before dropping to $800 per sq metre a year later, now change hands for around $3,400 per sq metre.
But the wave of expat buyers in the early 2000s was attracted to the cheap living in Argentina in general, not just the inexpensive property. Now, the same bife de chorizo will set you back $20 or more. “So it’s not a surprise that the number of ‘lifestyle’ buyers attracted to Buenos Aires on account of its low prices has been reduced to a trickle,” says Reynolds. A five-bedroom three-bathroom apartment in Recoleta with 518 sq metres of living space is being offered for $3.1m through Sotheby’s. This fifth-floor unit has parquet floors, a home office and separate maid’s quarters and is in a building with around-the-clock security
There are signs that the expat “lifestyle” buyers, who were often retired or semi-retired, are gradually being replaced by younger buyers (and renters) from North America and Europe. The attraction for them is Buenos Aires’ burgeoning start-up scene, which is concentrated in the sprawling, mainly middle-class Palermo district, home to a growing number of coworking spaces.
In a 2017 report on Tech Cities, Savills included Buenos Aires in a list of 22 cities at the forefront of the worldwide technology industry. According to the report, Buenos Aires — along with Santiago and Cape Town — “are magnets for talent in their regions and have the potential to become global players”.
But anyone taking a punt here will need increasingly deep pockets: according to the Reporte Inmobiliario website, the price of homes in Greater Buenos Aires shot up almost 13 per cent in the 12 months to September 2017 — although the price hikes have since levelled off.
Ricardo Frers, director of the Frers estate agency, has seen “some evidence that the typical overseas buyer is getting younger”, with most interest currently from US and French clients looking to relocate. In contrast, he says that Italian and UK buyers, enthusiastic investors in property in Buenos Aires after the bubble of the early 2000s burst, are conspicuous by their absence.
For the moment, the expat trend is downwards: data from Argentina’s Ministry of the Interior show that the number of residency applications from US nationals for the country as a whole fell from 2,240 in 2016 to 1,770 in 2017.
On the broad Avenida del Libertador in Palermo — a high-end location in spite of its heavy car and bus traffic — a three-bedroom two-bathroom unit in an apartment building dating from the 1930s is offered for $1.45m (through Frers). The property comes with a covered parking space.
In spite of the volatility of the property market, the pleasures of life in Buenos Aires — its civilised cafés, theatres and charming second-hand bookshops — are a constant, as are some of its problems, notably petty (and serious) crime, which appears intractable.
Buyers with young families often head for the suburbs: in San Isidro, a residential district just outside the city limits, a six-bedroom three-bathroom house built in 2008 is available for $1.4m. The property has a plot of 2,000 sq metres with an outdoor swimming pool and barbecue area (through Reynolds Propiedades).
Meanwhile, Buenos Aires’ famously conservative dining scene is steadily transforming. An example is Casa Cavia, a combined restaurant, bookshop and florist in the monied Palermo Chico district, whose latest menu — sparing in its use of red meat — was inspired by popular cartoon characters, with not a bife de chorizo in sight.