Category Archives: Real Estate

Can Argentina bounce back from the global economic crisis?

A season of lectures on the Real Estate market that was organized by the newspaper La Nación was hosted in the La Rural conference centre in November 2011. This series of lectures from experts in the Buenos Aires real estate sector discussed issues and all the latest developments in this important Argentine industry.  It was also the opportune moment to consider the impacts of the current global crisis on the Buenos Aires real estate market.

One of the main themes of the season of real estate lectures was whether the Argentine real estate market and economy was strong enough to weather the storm of the current global economic turmoil and if it could overcome all the obstacles that affecting investors, developers and buyers across the real estate.

One important point to underline in this discussion is that this isn’t the first time that Argentina has had to face economic hardships. Past experience shows that various sectors of the country’s economy have been strong: investment in property does not usually evaporate or volatilise in times of economic troubles. The strength of the real estate market was truly tested during the 2001/2002 crisis and yet it survived, which shows that Argentina has survived worse than the current economic instability.

Another issue that was addressed in the different conferences and lectures in November was the concern about the lack of policies or funding that support mortgage loans. It was clear that there seems to be no easy way to facilitate providing mortgages and loans to homeowners. Argentina’s economy and nature does not lend itself to mortgages and credit schemes: inflation and instability mean that mortgages will continue to be a foreign luxury that few Argentines will ever enjoy. In order to provide mortgage loans the economy would have to be more stable control inflation.

As 2011 comes to an end, the patterns of Buenos Aires real estate investment reveal the typical seasonal behaviour of investors and buyers: a fall in the number of real estate deals closed.  Another issue is also impacting the Buenos Aires real estate scene: the restrictions on purchasing US dollars, which is affecting all those who have to complete real estate transactions. The restrictions imposed by the government (as part of a scheme to stabilise the Argentine peso) is making real estate transactions difficult and in some cases deals are falling through as there aren’t enough dollars to complete transactions.

There are plenty of questions and doubts hanging over the Buenos Aires real estate market, which will only become clear as time passes. The results of the government’s recent economic measures will in time reveal the state of affairs and whether Argentina will bounce back from the global economic crisis. However, based on Argentina’s survival in past crises it should come out ok.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com

Buenos Aires, Argentina utility bills – Real Estate

Buenos Aires is a high rise city. You can’t walk one block in the Argentine capital without encountering an apartment block and fewer and fewer people live in houses. Each apartment block has its own complex system of communal maintenance, bills and employers. The cost of maintaining an apartment block is increasing and residents are finding that their Buenos Aires utility bills are costing nearly as much as their rent.

Apartment blocks in Buenos Aires are divided into different categories depending on how many facilities they have. The first category has three or more services such as, central heating, swimming pool, gym etc. Second level buildings have 2 different types of services; third only one and residents in fourth have no services or amenities. However, all buildings in Buenos Aires have their costs that all residents have to pay for. Expenses include electricity bills for lifts and lights, fire extinguishers, water tank cleaning, fumigation. In the last two months, all of these costs have experienced a sharp 12% increase.

On top of these experiences there are also the building’s staff salaries. The wages of porters and doormen has increased by 21.5% and so has the salaries of cleaning staff, rubbish collectors and gardeners. So the more services a building has the higher the costs for residents. These extra hidden costs are crucial to consider when buying an apartment in Buenos Aires. You may think it’s just a case of signing and paying for the property. However, the costs do not end there. People buying a holiday home should be aware that their apartment will still be charged for maintenance expenses even when they’re not there.

For those who are renting not buying on the Buenos Aires real estate market the costs can sometimes rival the actual cost of renting. However, some properties are more affected by the rises in costs in the Buenos Aires utility bills so make sure you choose well and take this into consideration when renting.

Buyers looking to rent should be aware that the profitability of renting has dropped to 4.5% thanks to expenses, when it usually stands at around 6%. Big time Buenos Aires real estate tycoons will not be affected, but investors who rent out a handle of properties will feel the impact of having to reduce profits to cover expenses.

The hope is that these costs in the Buenos Aires utility bills will eventually lower and that inflation too will be controlled. Yet, realistically that is unlikely to happen and investors and tenants will have to take expenses and maintenance into account.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com

Real Estate: Renting in Argentina

The number of people renting properties in Argentina in increasing at such a rate that experts are predicting a deficit of housing in the future. A study carried out by the UCA (Universidad Católica Argentina, in English: Catholic University of Argentina) shows a worrying increase in the number of homes occupied by renting tenants. In 2004, 12.8% of households occupied were rented out whereas in 2009 the percentage was 15%: quite a significant increase.

The high number of properties rented could be an indication of problems within families’ budgets and society as a whole. It could show that there is a housing shortage and that is why people are forced to rent, particularly in precarious settlements. Also, it reflects the limited disposable income of families as they have to put a large proportion of their monthly income towards their rent. This in turn also limits families’ ability to save money and contribute to the economy.
According to the report, between 2007 and 2009, the average number of rents paid by tenants rose 62.1% and during the same period, the INDEC recorded a huge increase in the price of renting on the Buenos Aires real estate market.

Prices for rent in Argentina increased the most in homes in towns and settlements with an increase of 97.4%. By contrast, less variation occurred in the urban middle class segment, where the increase was around 51.5%.  The report concludes that a process of regression is unfortunately occurring in Argentina and the Buenos Aires real estate market. Rent prices are increasing because the lowest income families do not meet requirements for rental housing in urban areas, as opposed to the middle classes who have other options and may even have access to mortgage credit.

The Catholic University of Argentina (UCA) believes that this process is closely linked to the increase in slums and illegal settlements in the last decade. Argentina has a huge deficit of housing, which has been exacerbated by the dramatic increase in population and migration in the last few years. There is now high demand for housing units in the poorer areas that led the rent in slums and settlements to go up significantly higher than in urban areas.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com

Real Estate Purchase Process in Buenos Aires, Argentina

 

OVERVIEW

Buying property in Argentina as a foreigner is legally straightforward:

Real estate in Argentina is typically held, bought and sold freehold. Property can be acquired by individuals and corporations. The only restriction concerning foreign real estate ownership applies in the immediate vicinity of Argentina’s borders, where such ownership is subject to prior government approval.

Owning Property in Argentina is safe for the following reasons:

Under the Argentine constitution foreigners have the same property rights as Argentine nationals. The property market is priced in US Dollars. This provides a shelter from economic crises for locals and protects foreign investors from fluctuations of the Argentine Peso. If you follow the well known 3L Rule (Location, Location, Location) you will not lose money.

There are also some differences with real estate transactions in other countries:

In Argentina every single real estate purchase must go through a special attorney called an “escribano público” (Notary Public). The escribano is crucial when buying real estate in Argentina. He has to check that the seller is registered as the owner, all taxes and duties have been paid, there is no lien on the property and that there are no existing mortgages attached. He prepares the boleto (binding pre-contract) and the deed and unlike the realtor he is fully responsible for his advice and actions.

Duration:

After the sale price has been agreed it takes approximately four to six weeks until the signing of the title deed transfer (equivalent to the exchange of contracts). If you are not willing to stay in Argentina for this time period you can grant a Power of Attorney: letting the deed be signed by a person you trust.

DOCUMENTS

The legal side of buying property in Argentina is straightforward. The only documents needed are your passport and your personal Argentine tax number or CDI (Clave de Identificación). To obtain a CDI you must prove your address in Argentina (rental apartment, friend’s house) with a “certificado de domicilio”.

This can be obtained at the nearest police station to where you are staying. With this document and your passport you must then go to the nearest AFIP office (Argentine tax authority) to get the CDI. If you do not speak Spanish it is recommended that you go there with somebody who does speak the language and is also familiar with the system. Otherwise, you can let somebody else do it for you (requires a Power of Attorney). 

BUYING PROCESS

This section explains what happens after you have found the property you wish to purchase. 

Reserva:

You will make an offer to buy the property at a certain price call Reserva. It is wise to always offer a lower price (at least 5%) even if you think the asking price is already attractive. To confirm your offer the seller’s realtor will ask you for a payment in cash amounting to 2% of the offered price. The offer (Reserva) is usually valid for a week. During this period the realtor is supposed to take the property off the market and inform the seller of your offer. The seller will either accept your offer, reject it or, most likely, make a counter offer. Then it is your turn to accept, reject or make a counter offer. If an agreement on the price cannot be reached and the reserva expires, you will get your money back. If the seller accepts your offer and you back out, your money will not be returned.

Boleto:

The Boleto (a binding pre-contract) is a document normally prepared by the escribano. This is an intermediary step where the seller receives 30% of the agreed sale price. It is most commonly used when the signing of the title deed transfer is scheduled 45 days or 2 months down the line. The boleto is basically the point of no return for both the buyer and the seller. If the buyer backs out, they lose the 30% down payment. If the seller backs out, not only do they have to return that 30% but they must also pay another 30% in compensation. But, unlike the reserva, the boleto also gives the prospective buyer the legal right to enforce the property sale (although any resulting lawsuit might take years).

Escritura:

The Escritura is the actual closing date when all parties get together to sign the official deed transfer. The buyer now takes possession of the property. All taxes on the property must be fully paid up at the time of transfer.

The agreed sum is paid in cash at this time or a transfer to a foreign bank account is set up and verified at a second meeting. It is important to note that the payment required for the escritura does not need to be made in pesos. In fact, most owners will only accept US Dollars or transfers to their accounts held abroad. The buyer does not have to be physically present to sign the transfer deed if a third party is authorised by a Power of Attorney to sign in their place. It is important at this point to have requested and obtained updated floor plans that reflect actual construction. Failure to do this may result in the new buyer having to pay the unpaid taxes of the previous owner. This also guards against any unlawful construction done to the property that could lead to problems in the future with the municipal government.

COSTS

Realtor commissions: 3% to 4% of the closing value plus 21% VAT (3.63-4.84%)

Money transfer fee: 3% to 6% (depends on the time of the year)

Escribano fees: 2% plus 21% VAT (1.21-2.42%)

Stamp fee: 3.6% in the city (Capital Federal) of Buenos Aires and 3.6% in the suburbs of Buenos Aires, but if the purchase is in US dollars you have to add a 20%, totaling 4.32%. If the property is for residential use, valued under ARS 600,000, and it is the client’s first purchase the stamp fee is waived. If it is priced over ARS 600,000, the stamp fee will only be paid on the difference (Purchase price minus ARS 600,000). The stamp fee is commonly split 50:50 between the buyer and seller but you must request this when you make your offer.

Transfer Tax: Tansfer Tax is 1.5% of property value, paid by the seller. However, this tax is not applicable if the resident seller is selling his main dwelling and commits to buy another property within a year.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com

Argentina Real Estate Appraiser Property Appraisal Buenos Aires

Argentina Real Estate Appraiser Property Appraisal Buenos Aires

Argentina Real Estate Appraiser Property Appraisal Buenos Aires. What is the property worth? Get the property valuation today.

Properly appraising a property’s value is often a challenge for real estate professionals.  An accurate appraisal helps finalize a real estate transaction correctly and in a timely fashion.  The correct pricing of a property serves as a starting point on which to base negotiations in a sales transaction.

One of the primary factors in real estate property in Buenos Aires is the property’s location.  This one element strongly influences a property’s price.  An appraisal must weigh the advantages and disadvantages of each location in terms of modes of transportation at hand, the area’s zoning, and the quantity and quality of public services available.  Prices can vary from one block to the next and from one side of the street to another.

The second factor which affects an appraisal are the physical characteristics of the property.  This includes its design and appearance, the property’s age, its condition, the type and quality of construction, its surface area and dimensions, and how well it’s equiped.

A good appraisal should take into account potential clients’ needs, the area, the property’s condition, lighting, what part of the neighborhood it’s in, proximity to transportation and commercial centers, and in the case of aparments, what floor of the building the property is on.

A real estate appraisal is often based on the appraiser’s experience and knowledge of the local market.   Some people in the real estate field simply use the area’s average per square meter value, but others believe that method to be too basic and unprofessional.  Each property has numerous variables, all of which are very important.  A good appraisal is based on visiting the property (inside and out),  having knowledge of the local market, taking into account the supply and demand for that area, and analyzing economic conditions at that time.

Properties in certain neighborhoods increase in value solely because they are located in a coveted area.  Modes of transportation available, the development of the area, and even the prestige of the neighborhood, as in the case of  Barrio Norte, Recoleta, Palermo Chico and Barrancas de Belgrano, are fundamental factors in maintaining a property’s value.  In these areas, the scarcity and high cost of available lots also contributes to increasing property values.

When considering an apartment, another influential factor in appraising its value are the amenities the apartment building offers.  If a buyer is able to afford the higher homeowner association fees for these services, the amenities add value to the property.

Argentina Real Estate Appraiser Property Appraisal Buenos Aires. What is the property worth? Get the property valuation today.

For years, mortgage lenders and consumers have called upon Kier Joffe Appraisals to provide high-quality appraisals on all sorts of properties throughout Argentina. By continuously analyzing Argentine real estate trends and refreshing our knowledge regarding valuation techniques through accredited courses, we’ve been consistently able to generate reliable home valuations for our clients.

All of our appraisers have more than 20 years of experience, and use the latest technology available to provide the most accurate, professional, and eco-friendly appraisals possible.

The proven Buenos Aires – Argentina lawyer professionals at the Kier Joffe law firm have experience working with foreign clients involved in all kind of cases in Argentina. Buenos Aires Argentina attorney professionals are knowledgeable in almost all the practice areas of law, to service its international cases in Buenos Aires Argentina. International clients will have the confidence of knowing that the case is being handled by an experienced and knowledgeable Buenos Aires  lawyer in Argentina.

www.kierjoffe.com