Brightly-coloured La Boca streetfront.
A street in the colourful neighbourhood of La Boca adjacent to the city’s port © Matthew Micha Wright

Those who have braved the Argentine property market over the past decade or so haven’t had it easy. First came the country’s sovereign default in 2001, which saw prices for the most fashionable Buenos Aires apartments tumble. From there, the only way was up – and they soared; two- and three-bedroom apartments jumped threefold, from $600 per sq metre in 2002 to $1,850 in 2012.

Those who enjoyed the subsequent boom, however, had not counted on the Argentine president Cristina Fernández, whose attempts to shore up an ailing economy included exchange controls to prevent capital flight. Some steely-nerved investors pocketed big gains, but prices have headed down once again, with an average drop of 8.1 per cent in the past two years, according to Reporte Inmobiliario, a specialist property portal.

“I know if times had been normal we could certainly have got more for our house; we ended up taking something I would’ve dismissed at first for being way too low,” says Jude Webber, the FT’s former Southern Cone correspondent, who sold her family home in the Argentine capital last summer to move to Mexico City.

Still, there is an upside to every Latin American story. A renovated, French-style, five-bedroom apartment in the capital’s upmarket residential area of Recoleta, is on sale for $795,000 with Sotheby’s International Realty. Step across to Rio de Janeiro and prime real estate prices are two-thirds higher, according to Savills World Research. Also in the Recoleta area, a two-bedroom apartment in an art deco building – just around the corner from the former home of one of the suburb’s most famous residents, writer Jorge Luis Borges – has an asking price of $260,000. That is at least $30,000 less than it would have fetched two years ago, according to Iuri Izrastzoff, from the estate agent Izrastzoff Bienes Raices.

Unlike the polluted, skyscraper-lined megacities of other Latin peers, Buenos Aires has wide boulevards and parks that border its grid plan. European monuments and grand opera houses have become symbols of the city’s sophistication since the early 20th century, when agricultural wealth from the heartland of the nation transformed the capital.

Today, in places like La Boca – near the city’s port – streets with cobblestones worn down like gauchos’ teeth bustle with talkative crowds and Italian boutiques. The area’s thriving arts scene attracts a young expat crowd – across the city as a whole more than half of all property transactions between 2002 and 2006 were from foreign buyers, according to law firm Baker & McKenzie.

However, those thinking of taking the plunge in Argentina will need nerve and staying power. Although the country abandoned the link with the US dollar 13 years ago, most property is still priced in this currency. Yet exchange controls mean dollars are scarce. In addition, the government has plenty of economic headaches (a US court decision recently put debt rescheduling plans into a spin) and the value of the peso – the local currency – has collapsed. To cap it all, mortgages are few and far between, with only 3 per cent of nationals able to access such facilities. It has, therefore, become more difficult to unload homes.

Yet as property is priced in dollars, the timing may now be right for international buyers with ready cash. Parker Stanberry, a US expat living in Buenos Aires and founder of Oasis Collections who began redeveloping his own portfolio of design-oriented apartments for short-term rentals in 2004, underlines the value of access to funds. “When I first came to Buenos Aires, competition with locals was tough,” he says, “but today my offshore account is my biggest calling card.” Even for those not interested in living in Argentina, relatively high rental yields (of up to 10 per cent a year) are making the market an attractive investment.

After Recoleta, homes in the plush northern suburbs that line the railway to the city of Cordoba are much sought-after. Olivos, for example, boasts a marina, a golf course and both a British and American international school, but it is only a 20-minute train ride from downtown.

Four-bed mansion in Acassuso, $4.5m
Four-bedroom mansion in Acassuso, $4.5m © Getty

In nearby Acassuso, a four-bedroom, Renaissance-style mansion, with river views, a tennis court, a swimming pool and 9,000 sq metres of land, is priced at $4.5m with Sotheby’s International Realty.

Kirchner cannot run in next year’s presidential election, so change of some sort is inevitable, and there are hopes of more moderate economic policies. The government is beginning to mend ties with international markets, and the prospect of a shake-up next year is already being felt.

The number of property purchases in the capital is up slightly since the start of 2014, demonstrating a renewed sense of confidence – 3.5 per cent of Argentines purchased a property this quarter compared with just 2.1 per cent six months ago, according to research from the FT’s LatAm Confidential, which surveyed 1,000 Argentine consumers as part of its investment research on the region.

“Argentina will return to the international market whichever side wins the elections next year, and as it does, the property market should recuperate,” says Izrastzoff.

One high-end property agency is already pitching its portfolio to potential clients in Paris next month together with a French law firm. France’s recent tax hikes may also encourage prospective buyers. However, it is the city’s distinctly Parisian culture that will continue to woo visitors. Whether there are buyers brave enough, only time will tell.

Lucinda Elliott is a researcher on the FT’s LatAm Confidential

Photographs: Matthew Micha Wright; Getty


Buying guide

● There are no restrictions on non-residents owning property or land under a 1,000 hectares in Argentina

● Average temperature of 18C

● Income from rental units is taxed at 21 per cent

● No capital gains tax in Argentina when the property is sold for a profit

What you can buy for . . .

$500,000 A renovated 1920s apartment in high-end Recoleta, a 15-minute taxi ride from downtown

$1m A four-bedroom family home in the suburb of Olivos

$5m Mansion estate in the suburb of Acassuso, 20km from the city centre

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