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| Argentina Housing Boom Lures Foreigners; Shuts Out Locals April 2--Accustomed to seeing starter homes for $500,000, American tourists in Buenos Aires often do a double-take when they see ads asking $45,000 for a downtown loft or $1.5 million for a winery and 120,000 acres of land in Central Argentina. Although such listings seem like a bargain to many foreigners, they don't look that way for most Argentines. In some areas of the country, real estate prices have exceeded their pre-crisis levels, putting once-affordable homes out of reach of most local buyers. Real estate transactions are commonly carried out entirely in cash, and most Argentines have poor access to credit and are unable to pay for a home outright. Analysts believe Argentina's current property boom will be enjoyed primarily by foreign investors and wealthy locals. Foreigners now account for as much as 25 percent of sales in most tourist-friendly neighborhoods like Palermo and Ricoleta. The mortgage lending market is miniscule compared with most other countries, and does not provide enough funds to meet the demands of middle-class buyers. Argentina's cash-only culture is also limiting growth of the domestic property market. Argentines traditionally accumulated money over the years from salaries, saving millions in mattresses and safe-deposit boxes, but many lost substantial portions of their savings in the financial crisis of 2001. With home prices rising fast and so many Argentines struggling to regain what they lost, many wonder if they will ever be able to save enough to buy into the property boom. Source: Dow Jones International News (Mar. 2, 2006) Note: Abstract provided by NAR’s Information Central |
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