And, despite – or perhaps even partly because of – an economic collapse in the early days of this millennium, some experts are predicting that Argentina will soon add 'international property hot spot' to its look-at-me list. Indeed, claims that Argentina now has the economic foundations to attract foreign property investors appear to have a firmer footing than Maradona's claims to have scored the winning goal against England in 1986.

Take, for example, foreign investment – that oft called-upon indicator of capital confidence. In 2005, 566 million dollars were invested in infrastructure in Buenos Aires, Argentina's capital, alone. But, importantly, foreign dollars are not the only injection the Argentine economy is receiving. Rather, its property market is also being driven by domestic demand. "What makes Argentina one of the most interesting countries that we have come across," say emerging market experts Someplace Else, "is that the demand and growth in the real estate market is down to the local population.

Moreover, of the large number of locals that are buying, most purchases are being done in cash – without any bank financing. This means that the foundations for the expected real estate boom are solid and genuine." At the heart of this boom is Buenos Aires – a charming mix of European sophistication, Latin drama, and appealing residential architecture. "The most exclusive districts of the Argentine capital average between £1,000 and £1,600 per square metre, making it one of the most undervalued capitals in the world," say Someplace Else.

But where to invest to make the best of the current conditions? Certainly, the moth-eaten mantra 'location, location, location' matters as much in the Southern Hemisphere as it does in the north. "Price increases vary greatly, ranging from about 15 to 40 per cent, depending on neighbourhood," reports Pericles James of Buenos Aires Real Estate.  "Palermo Viejo achieved growth rates of 45 per cent in 2006." James, furthermore, is confident that such growth is no flash in the pan. "I expect prices to continue to skyrocket," he says.

For those looking to capitalise on BA's rental market, James tips Recoleta, Palermo Soho, Palermo Viejo and Barrio Norte as being best for investors seeking doubledigit annual returns. In terms of capital appreciation, he is more specific: "The best returns are in Palermo and Palermo Vieja. I suggest that if you purchase a two-bedroom property of $120,000 you will make a very hefty return on your investment."

So, it would seem that, these days, BA is a hot hood for more than just the Tango.

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Latin property boom
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Article published November 2007