Property prices picks-up pace in Argentina
It seems the tides are turning for the Argentinian property market, whose growth had stagnated off the back of a decade of populist rule. It has been one year since President Mauricio Macri took office, and his positive approach to the country’s economy seems to be having an effect.
To achieve this stimulus, the government introduced a tax amnesty program which enabled buyers to begin applying for mortgages from a mixture of grounded lenders. Economists have predicted that these opportunities will see a boom in local development as many of the projects tabled can now apply for funding.
With inflation falling over the next year, this should give the markets breathing room, and should allow mortgage lenders to make a good return. A lot of the countries issues stem from currency controls put in place by the previous administration. Many had argued these controls limited access to U.S. dollar. U.S. dollars are a far more stable currency, so many Argentines choose to conduct business in this currency.
So how does the amnesty program work?
Argentines can now feel comfortable declaring previously hidden wealth. With the economy crumbling, many people choose to hide sizeable chunks in fear the local government would absorb their savings to balance the countries books. People who use the program can avoid paying a fee if they invest their money in the governments property development fund. This then allows them to apply for a government protected mortgage.
As confidence in the project grows, more people are likely to invest. It seems demand for property in Argentina could soon overtake supply, something the country hasn’t seen for decades.