Buying real estate in Argentina?

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Is 2025 a good time to buy real estate in Argentina?

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property market Argentina

Everything you need to know is included in our Argentina Property Pack

Are you considering buying property in the land of Tango? Are you wondering if it's the right time to buy?

When it comes to market timing, people hold different beliefs. Your friend from Buenos Aires might tell you that now is the ideal time to buy property, while your Argentinean acquaintances may think that prices will soon decline.

At TheLatinvestor, when we create articles or update our pack of documents related to the real estate market in Argentina, we base our work on verifiable facts and concrete data rather than subjective opinions.

We have collected and examined all the official reports and statistics from government websites. Based on this extensive research, we have compiled a complete and reliable database. Here's what we discovered, which can assist you in deciding whether now is the right time to purchase real estate in Argentina.

Dive in and enjoy!

How is the property market in Argentina now?

Argentina is, today, a very stable country

Positive

If you want to invest in real estate, prioritize stability as it influences the success of your investments. It is an information you need as a foreigner buying a property in Argentina.

You are probably already familiar with the fact that Argentina is known for its strong stability. The last Fragile State Index reported for this country is 44.2, which is an extraordinary number.

As of my last update, Argentina is not typically characterized as a very stable country due to its ongoing economic challenges, including high inflation rates, significant national debt, and periodic financial crises. Additionally, political instability and social unrest have further contributed to the perception of instability in the country.

This country offers a stable ground for investment. Let's proceed to assess the economic forecast.

Argentina will keep growing in the next 5 years

Positive

Second thing to do before buying a property: determine if the country's economy is in good shape.

As projected by the IMF, Argentina will end 2024 with a growth rate of -2.8%, which is disappointing. Regarding 2025, the figure we're looking at is 5%.

However, the negative growth rates won't be a long-term trend since Argentina's economy is expected to increase by 11.9% during the next 5 years, resulting in an average GDP growth rate of 2.4%.

The expected sustainable growth rate in Argentina indicates a stable and improving economy, which can lead to increased property values and rental demand. For real estate investors, this means potential for higher returns and reduced risk over time.

That said, GDP growth is just one piece of the puzzle!Argentina gdp growth

Argentina is delivering a lot more building permits

Positive

When determining whether it's a good time to purchase a property in a country, it's useful to take into account the quantity of building permits issued. When more building permits are issued, it demonstrates a strong vote of confidence in the property market's growth potential.

We have excellent news for you: the number of building permits delivered is exploding in Argentina.

Indeed, in the past year, according to Instituto Nacional de Estadística y Censos (INDEC), the total surface of building permits delivered by the Argentinian municipalities rose by 49.5%.

The data here strongly suggests that many people think it's a good time to invest in real estate.

Another important point to note is that there will be an increase in the number of real estate available in the market. Based on this information, it's possible that property prices will decrease in Argentina in 2025.

Argentinian inflation leaves everyone clueless about home prices

Neutral

Argentina's home prices have increased by 154.6% in 5 years according to Instituto Nacional de Estadística y Censos (INDEC).

It means that if you had bought a ranch in the Pampas for $750,000 five years ago, then it would now be worth around $1,910,000.

Currently, the galloping inflation creates a confusing situation where nobody knows how much things actually cost anymore, leading to widespread frustration.

At the end, it's difficult to draw conclusions from this data.

You can find a more detailed analysis of the real estate prices in our property pack for Argentina.Argentina housing prices real estate

Everything you need to know is included in our Argentina Property Pack

Argentina's population is growing but getting poorer

Negative

Before you purchase real estate, take a moment to consider population growth and GDP per capita, because:

  • a growing population means more people needing homes
  • a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)

In Argentina, the average GDP per capita has changed by -1.3% over the last 5 years. It's not a good number. However, the Argentine population is growing (+3% in 5 years).

Rental yields are quite low in Argentina

Neutral

If you want to know whether a property investment can be profitable, look at the expected rental yields.

Rental yield is the measure of how much money you can earn from renting out a property compared to its cost.

According to Numbeo, rental properties in Argentina offer gross rental yields ranging from 1.0% and 3.7%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Argentina.

It suggests that your real estate investment won't generate much returns or income.

As seen before, there might be a drop in property prices (due to an increase in real estate supply). However, since there won't be an increase in wealthy tenants, then we don't know whether gross rental yields are likely to increase in Argentina in 2025.

Argentina rental yields

Everything you need to know is included in our Argentina Property Pack

In Argentina, expect minimal inflationary effect

Neutral

Inflation is the general increase in prices of goods and services over time.

It's when your customary plate of asado costs 600 Argentine pesos instead of 500 Argentine pesos a couple of years ago.

If you're contemplating investing in a property, high inflation can offer several advantages:

  • Property values have a tendency to increase over time, potentially leading to capital appreciation.
  • Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
  • Inflation reduces the real value of debt, making mortgage payments more affordable.
  • Real estate can act as a hedge against inflation, effectively preserving the value of the investment.
  • Diversifying into real estate provides stability during inflationary periods.

As per the IMF's forecasts, over the next 5 years, Argentina will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.

This data means that Argentina is anticipated to experience negligible inflation. Unfortunately, in the absence of inflation, purchasing a property now may not result in substantial price increases or substantial profits in the future.

Argentina's currency is currently very low

Positive

If you plan to buy your property with a foreign currency, this is for you.

The Argentine Peso (ARS) is greatly devalued: the currency is currently 40-44% over the past five years.

As a foreign investor, purchasing property in Argentina while the currency is low could offer significant cost advantages, as the investment would require less foreign currency to acquire valuable real estate assets. However, it's crucial to consider the economic instability and potential for further devaluation, which could impact the property's future value and the investor's ability to repatriate profits. Additionally, navigating Argentina's complex regulatory environment and potential political risks should be carefully evaluated to ensure a sound investment decision.

Is it a good time to buy real estate in Argentina then?

Time to conclude !

Argentina is currently experiencing a period of stability, which is a promising sign for potential property buyers. While the country has faced negative growth rates recently, this trend isn't expected to last. In fact, Argentina's economy is projected to grow by 11.9% over the next five years, averaging a GDP growth rate of 2.4% annually. This anticipated economic growth suggests a more stable and improving economy, which could lead to increased property values and rental demand. For those considering investing in real estate, this means there could be opportunities for higher returns and reduced risk over time.

Another positive indicator for the property market in Argentina is the increase in building permits being issued. This surge in construction activity suggests that there is confidence in the market and a belief in future demand for housing. As more properties become available, it could create a competitive environment that benefits buyers, offering a wider selection and potentially better prices. This increased supply, coupled with economic growth, could make 2025 an ideal time to invest in Argentine real estate.

Despite the challenges posed by inflation, which often leaves people uncertain about home prices, Argentina's situation might not be as dire as it seems. The country's inflationary effects are expected to be minimal, which could provide a more predictable environment for property investment. While inflation can complicate financial planning, a stable economic outlook can help mitigate these concerns, making it easier for investors to make informed decisions about purchasing property.

It's also worth noting that Argentina's population is growing, albeit with a trend towards increasing poverty. This demographic shift could lead to a higher demand for rental properties, as more people may opt to rent rather than buy. According to Numbeo, rental properties in Argentina currently offer gross rental yields ranging from 1.0% to 3.7%. This potential for rental income, combined with the country's economic growth and increased construction activity, makes 2025 a potentially advantageous time to consider buying property in Argentina.

We hope this article has offered you practical support!. If you need to know more, you can check our our pack of documents related to the real estate market in Argentina.

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.