Author Archives: Elias Kier Joffe

Property Prices at Lowest Price Since the 2001 Crisis

Property Prices at Lowest Price Since the 2001 Crisis

Those looking to purchase property abroad would be wise to consider purchasing in Argentina at this moment, with the guidance of bilingual (Spanish/English) Argentine lawyers. Currently, Argentines are hesitant to spend before this year’s presidential elections, resulting in some of the lowest property prices in years. But while locals are holding back, foreigners without ties to the local economy can invest now at extraordinary prices. Kier Joffe is the premiere real estate law firm for foreigners in Buenos Aires, and with our expertise and guidance, the buying process is simple, direct and stress-free. We are proud to call ourselves the only bilingual Argentine lawyers with such expertise in the real estate industry.

In January 2015, only 1723 property units were sold in Buenos Aires – 15 percent less than were sold a year ago, serving as the worst numbers for the month in 12 years. The average price was $907,306 Argentine pesos.

The sale and purchasing of property is in a historic low in the City of Buenos Aires. 2014 ended with some of the lowest indicators in 30 years, and 2015 has started with a similar forecast.

2014’s numbers are the lowest since the months immediately following the economic, political and social crisis of 2001 in Argentina. In fact, during the years after the 2001 crisis, it was reported that 67 percent more units were sold than were sold in 2014.

For example, in 2001, 54,493 contracts were signed, in 2001, 56,293, and in 2014, only 33,690. The information comes from the College of Notaries in the city of Buenos Aires, which measures changes in the market. Real estate lawyers in Argentina have noted the same phenomenon, noting that Argentines are buying less than they have in recent years.

CONTEXT

Property prices are much lower than they were three years ago. Since the implementation of tight monetary restrictions, the price of properties in dollars fell between 10 and 15 percent, and remain low now, according to reports by the specialized consulting firm, Reporte Inmobiliario.

Analysts consulted by newspaper La Nacion agree that causes for the low level of activity in the sector are due to more than just the restrictions on dollars. There is an existing tendency for sellers to delay activity as they wait for the administration to change this year.

There are also difficulties accessing mortgages, a wider gap between salaries and prices, the recessive nature of the economy and consumers’ perception of high prices. At this time, the square meter in an apartment with two or three rooms costs US$ 1700, on average, while two years ago that price was US$ 1900.

Mortgage lending has practically disappeared from the market, and those that are available are not easily accessible. For example, to qualify for a credit of AR$ 500,000 pesos (or US$ 57,736.00 using the official exchange rate), paying the loan off in ten years requires monthly payments of AR$50,000.00. This type of capital is only enough to purchase half of a two-room unit.

While Argentines are experiencing difficulty obtaining the capital needed to buy a property, the climate is ideal for foreign investors looking for a beautiful property at an accessible price. But it is important to seek the assistance of an expert real estate law firm in Buenos Aires first. If you are interested in learning more about how to buy property in Argentina as a foreigner, contact us. Celebrating 75 years in the business, we are real estate attorneys that specialize in assuring that foreigners in Buenos Aires do not experience any of the headaches that come with working through a new and different legal system.

With an international reputation worthy of mention in The New York Times, Kier Joffe is your one-stop shop for information and legal services related to buying a property in Argentina as a foreigner. The first firm to specialize in providing services to international clients buying property in Argentina, we have assembled a top team of lawyers, accountants and notaries dedicated to making your buying experience as smooth as possible.

For more information, just fill out the Quick Contact Form on the right or give us a call today, and we will get back to you.

USA: +(1) 212.300.6377

ARG: +(54) 115.218.3100

Mendoza Argentina Lawyers|Mendoza Real Estate Attorneys|Mendoza Real Estate Law Firm

Skilled Real Estate Lawyers in Mendoza Argentina

Argentina has thrived in the international wine market for fifteen years. While the country was able to become the fifth-largest global producer of wines and world’s tenth-largest exporter, inflation and high production costs, a weak peso and restricted access to credit are affecting the winemakers sustaining the industry. La Nacion’s December 31 article, “Wine: The Crisis Obligates Us to Revise the Numbers,” explores the transformation that the Argentine wine industry is facing in the midst of economic turbulence at home. The Argentine wine industry is controlled and consumed by a small number of actors. Argentine winemakers depend on just a handful of companies that import supplies like bottles, boxes and cork, and 80 percent of exports are delivered to just five countries: The United States, the United Kingdom, Canada, Brazil and the Netherlands. Argentine wineries have paid the price of so little competition between providers:  the high price of supplies means production is expensive, which gives the advantage to bigger wineries that can find ways to make a profit through economies of scale. Meanwhile, smaller wineries that can’t compete have been gradually bought up by bigger players.

Mendoza Argentina: Experienced Real Estate Attorneys

In the United States, wines in the ten-dollar range are the big sellers, says Susan Balbo, President of Wines of Argentina, the organization that represents and supports local wine exporters and promotes Argentine wine abroad. And only bigger wineries can manage to export these less expensive bottles profitably. The result of this phenomenon is that only a small group of wineries have come to dominate the wine export market. Argentina became a big player in the international wine market in the 90s, when hundreds of millions of dollars were invested in transforming the quality of Argentine wine, which had traditionally been mostly generic and low-quality, with a focus on promoting Malbec in foreign markets. When the 2001 economic crisis occurred in Argentina, the country became extremely cheap for foreigners, and international investors poured in. With three unique wine varieties, Malbec, Bonarda and Torrontés, the Argentine wine market was booming.

Top-Notch Law Firm in Mendoza Argentina

But with the current state of affairs, the future of Argentine wine is changing. In 2013, profits from Argentine wine exports fell for the first time in a decade, and lately, countries like Chile, Australia, Italy and Spain have taken larger slices of market share that Malbec from Mendoza once enjoyed. Spain has high subsidies on wine exports to help winemakers make profits while charging low prices, and countries like Chile have free trade agreements with countries like the United States and China. These factors make it even more difficult for Argentine wine to compete internationally. It’s become expensive to produce that ten-dollar wine, as the cost of producing a box of wine often exceeds what can be made off of the bottles. Smaller wineries face two choices: A) convert themselves into large-scale productions focusing on lower-priced bottles or B) produce less, but charge more. It may be inevitable that the Argentine wine industry heads towards becoming a market dominated by a small group of big conglomerates in the next few years. This would not be a first, as in Chile, only four groups dominate wine production. Who will survive the transition, or the shape that smaller wineries will take, is yet to be determined. Kier Joffe has worked with international clients in Argentina for over 70 years, and our team members have become experts on the topic of buying and selling wineries in Mendoza, Argentina. Foreigners seeking advice or legal guidance on any matter related to Argentine wineries are encouraged to contact us for more information about our services.

Why is critical to retain a skilled Attorney when Buying Real Estate in Argentina

Argentina’s cities and landscapes offer foreign investors limitless possibilities when it comes to property. Here, there’s something for everyone, as Argentineans are passionate about everything from literature, theater and sport to fine cuisine and design. With an international reputation worthy of mention in The New York Times, Kier Joffe is your one-stop shop for information and legal services related to buying a property in Argentina as a foreigner. The first firm to specialize in providing services to international clients buying property in Argentina, we have assembled a top team of lawyers, accountants and notaries dedicated to making your buying experience as smooth as possible.

Whether you’re seeking a vacation property in Buenos Aires, an estancia in the pampas or a mountain cabin in Patagonia, foreign currency goes a long way in Argentina, where many homes are undervalued as much as 30%. The only legal restrictions on foreign property investment are on property near Argentine borders, where the government must approve transactions. Under the Argentine constitution, foreigners also have the same property rights as Argentines. Furthermore, since the value of properties is measured in dollars, and since all purchases must go through a notary, who tracks the history of the property and spots existing liens, Argentina is an attractive and safe place to buy if you find the right advisors to assist you.

Quick Facts about Buying Property in Argentina

Every country has its own complex set of property laws, which means that it is even more important to make these purchases with the help of a local expert who is fluent in your language and knows what foreign buyers struggle with the most. When it comes to buying in Argentina, there are a few simple concepts investors should understand before shopping for a property.

-The process of purchasing property involves a lawyer and a notary, and the costs of all this usually make up about 3 percent of the sale price of the property.

– Payments are usually conducted via wire transfer to a foreign bank account, and financing must be arranged through a foreign bank, as mortgages are not available in Argentina.

– A property owner who spends at least six months out of the year in Argentina is considered a resident for tax purposes.

– Buenos Aires has no property tax.

– Outside of Buenos Aires, tax rates depend on the value of the property, but will rarely cost you more than US$500 a year.

–  In Buenos Aires, rental properties are taxed at a rate between 10 and 30%, depending on the value of the property.

That said, it is common for lawyers or those sellers to cheat foreign buyers in certain aspects of the transaction, which makes it even more important to find a trustworthy lawyer. For example, there is a 3.6% tax on all property purchases in Buenos Aires, which is usually split between the buyer and seller. Dishonest sellers may be able to convince buyers that they need to pay that tax in full, which is why our team makes sure to stay involved in all aspects of the transaction. It is important not to make the mistake of closing the deal before hiring an independent and highly-reputed lawyer, because realtors’ real motivation is their own commission, not the sellers’ needs.

Where to Buy

Foreigners are increasingly attracted to the wide variety of landscapes and scenery that Argentina offers at an affordable price.

Buenos Aires is beloved for its European-style architecture and rich, vibrant culture, not to mention the fact that the per-foot cost of apartments will be between one-third and one-tenth the cost of properties in European cities. Apartments are spacious and well-constructed, and both older, turn-of-the-century and modern architecture is prevalent throughout the city.  Neighborhoods like Recoleta, Puerto Madero, Palermo y Las Cañitas are comfortable and full of spacious, beautiful apartments.

To the north of Buenos Aires are conveniently located suburbs, where buyers can make long-term investments on the family-style houses in neighborhoods like Nordelta, where there are many gated communities with 24/7 security. These homes are built for big families, and are often equipped with pools, large grills and spacious yards. Apartments of approximately 50-70 square meters, and more spacious homes in the northern suburbs, go for around US$100-250,000.

Investors looking for a less traditional property surrounded by scenic landscape can head far from Buenos Aires, to the regions of Mendoza in the Northwest, or Patagonia in the South. In the wine country of Mendoza, 40 acres of land with a view of the Andes can sell for less than US$ 100,000. Down South, mountain homes nestled amongst the mountains and lakes near Bariloche, one of Argentina’s ski capitals, are available for around US$ 100,000 as well. Both Mendoza and Bariloche are ideal for foreigners, with easy access to airports, active and bustling city centers and limitless outdoor activities for the adventurous spirit.

Kier Joffe’s 70 years of experience have placed us as the go-to firm for foreigners seeking to buy property in Argentina. Our expertise in Argentine property law, as well as our understanding of foreigners’ taste and needs, greatly simplifies what can be an intimidating process for a buyer, and we’d love to talk to you if you are looking to make a purchase in the lovely country we call home. For more information, just fill out the Quick Contact Form on the right or give us a call today, and we will get back to you.” 

USA: +(1) 212.300.6377
ARG: +(54) 115.218.3100 

Argentina Returning to Local Bond Market After Five Years

Bloomberg.com By Camila Russo

Argentina is completing its first local bond sale in five years as part of its efforts to return to global credit markets.

The government is offering 4.4 billion pesos ($542 million) of three-year bonds today with yields tied to the benchmark Badlar rate plus 2 percentage points, or a total of about 26 percent. The Treasury issued 5.5 billion pesos of the 2017 notes in March, its first sale in local markets since 2009.

By tapping the local market, President Cristina Fernandez de Kirchner’s government is reducing its dependence on state agencies and the central bank to finance its deficit, while helping the monetary authority drain liquidity from the economy. Argentina is mending relations with international creditors, compensating Repsol SA for the takeover of YPF SA and paying the Paris Club, as it seeks to regain access to international financing.

“Since the default, investors were always more willing to lend to the central bank, but now the market is assigning the Treasury a similar risk,” said Aldo Pignanelli, a former central bank president who now runs research firm Saver in Buenos Aires. “It’s another step toward normalization.”

Argentina is still trying to move beyond a record $95 billion default in 2001 that locked it out of credit markets. The government is appealing lower court rulings in U.S. courts that ordered Fernandez to pay holdout creditors including billionaire Paul Singer in full for defaulted securities.

Yield Spread

The notes Argentina sold in September 2009 yielded Badlar plus 300 basis points, or 3 percentage points. Badlar, the benchmark rate private banks pay for 30-day deposits of 1 million pesos, was 12.2 percent at the time. The deposit rate was 23.81 percent on June 4, according to the latest data available from the central bank.

The notes being sold today yield less than local bonds due 2016 sold by state-controlled oil producer YPF yesterday, which pay 320 basis points over Badlar. YPF’s dollar notes yield less than Argentine government securities in the bond market.

The extra yield investors demand to own Argentine bonds over U.S. Treasuries narrowed 0.23 percentage point to 7.72 percentage points at 1:50 p.m. New York time, according to JPMorgan Chase & Co.’s EMBI Global indexes.

With annual inflation estimated at 39 percent in April, investors who buy the notes are betting the government will be successful in curbing consumer price increases, according to Mariano Tavelli, the president of brokerage Tavelli & Cia., who said he might buy the bonds.

 

Chinese President’s visit to Argentina

Chinese President comes to launch the largest foreign investment in Argentina.

China will invest  USD 4,714 million to build the mega-project and another USD 2,099 s for “Belgrano Cargas”. Interest in a bi-oceanic corridor in San Juan.

Chinese President Xi Jinping will arrive in the country on July 19 to kick off the largest Chinese investment abroad : the construction of dams santacruceñas Jorge Néstor Kirchner and Cepernic . They also speed up the modernization of the Belgrano charges , the other work of interest to the Asian power . The fifteen additional projects that Argentina hoped to excite the Chinese will wait.

This was made clear Chinese Foreign Minister Wang Yi to President Cristina Fernandez and ministers with whom he met during his visit to the country. They are not insignificant investments , totaling USD 6,800 million. But for now , there will be more .

On Wednesday, Wang and Hector Timerman foreign ministers outlined the agenda for Xi , which hit the country after attending the summit of BRIC countries Brazil, on July 15 , and will be one day, as reported by The Chronicle on 1 this month. The start of construction of dams santacruceñas was on top of Chinese priorities. That country will USD 4,714 million that the work is valued . This is an unprecedented outlay for the Chinese in a third country and , at the same time , the most expensive work conceived Kirchner . Possibly , Xi and Cristina involved a kind of foundation stone laying by videoconference.

A consortium composed Electroingeniería , Osvaldo Acosta company and Gerardo Ferreyra, and carry forward the Chinese Gezhouba dam construction . 100% financing is awarded the China Development Bank (CDB ), providing a 15 -year LIBOR rate plus 3.8%. Sinosure insurance is involved in the credit.
Financial negotiations are dilated and still in its final stages . In late March , a delegation from the Chinese Ministry of Commerce in the country finalized meetings with officials and businessmen early May and sent will reach the Chinese Ministry of Finance and Economy . Ministers of Economy and Planning , Axel Kicillof Julio De Vido , also traveled to China to define the details of the agreement.
The first disbursement of money, between USD 400 and USD 500 million , scheduled for May , but was delayed . XI ‘s visit , understand sources involved in the negotiations, should expedite the arrival of currencies , which swell the reserves of the Central Bank. In total , they come between u USD 3,800 and 3,900 million to the country ; the rest will be used to buy turbines in China.
The Belgrano Cargo is the other major priority of the Chinese government. There too the CDB financed much of the work, although the Argentine State shall provide s about USD 200 million. In this case , the CBD provides a loan of USD  2,099 million to 7.1 % , and a 15 year term . Of that money , USD 1,235 million will go to work (and therefore enter the country ) and the rest to buy cars and locomotives from China. The Belgrano charges is of strategic importance to China: it looks like the gateway to the port of raw materials to purchase to Argentina .

Similarly , a work in which the Chinese mildly put the eye is the bi-oceanic corridor Agua Negra , in San Juan , which would open a goods issue for the Pacific. The Binational Entity Agua Negra tunnel ( Ebitan ) should announce in the coming weeks what consortia are finalists in the bidding for the work, valued at USD 1,275 billions . Of the 22 consortia that were submitted to the competition, there are four Chinese involvement with China Railway 18th Bureau , China Communication Construction Company, China Railway Construction ( in partnership with Electroingeniería ) and Sinohydro .

To 2013 , De Vido and Kicillof traveled to China to present another 15 investment projects by some USD 19.000 million. But Wang made ​​it clear that , for now , must wait .