House Hunting in Argentina: A Historic Flat in Central Buenos Aires

A Five-Bedroom Flat Overlooking the Bosques de Palermo

$1.6 MILLION

This five-bedroom, three-and-a half-bathroom apartment is in the Palermo Chico neighborhood of Buenos Aires, Argentina, an upscale enclave in the city center crisscrossed by winding streets lined with villas and shade trees. The 3,500-square-foot, sixth-floor apartment is across the street from Plaza Alemania in the Bosques de Palermo, Buenos Aires’s largest park.

The 1937 historically designated building is ideally located, said Adriana Massa, the CEO of Adriana Massa Sotheby’s International Realty, which has the listing. “All the real estate apartments that overlook the Bosques de Palermo are premium properties,” she said. “It’s our Central Park.”

Past an entrance hall, the spacious living room faces the boulevard and the park through floor-to-ceiling windows that open to a balcony. There are built-in shelves on either side of a fireplace, and Slavonian Oak floors in a herringbone pattern, which cast a warm glow. The adjoining dining room is through double pocket doors, and both rooms overlook Plaza Alemania. The çağdaş kitchen, renovated five years ago, is tucked into the center of the home, between the dining room and the housekeeper’s quarters, which has a bedroom, a bathroom and the laundry room. A pantry is just off the kitchen and dining rooms, and a generous half bath is near the entrance.

A broad hallway with herringbone floors and an arched ceiling runs from one end of the 3,500-square-foot apartment to the other, separating the common spaces and living quarters.Credit…Adriana Massa Sotheby’s International Realty

To the right of the entrance, a bright, broad central hallway with an arched ceiling leads to the home’s family area, which has four bedrooms and a niche for a playroom or family room off the hallway. The bedrooms face the back of the building, away from the boulevard, with large windows drawing in abundant sunlight. The main bedroom has oak floors and an en suite bath, while the remaining bedrooms are carpeted in slate blue over hardwood and share a hall bathroom. The apartment has central air-conditioning, and comes with two parking spaces.

Palermo Chico, on the banks of the Río de la Plata and Argentina’s Atlantic coast, “is considered the most chic and elegant neighborhood of Buenos Aires,” Ms. Massa said, noting that the area’s mansions “belonged to the wealthiest and most traditional families of Argentine society” during the early 20th century. This apartment is a short walk from Palermo Gardens, designed by the French landscaper and architect Carlos Thays, and the Latin American Arka Museum of Buenos Aires. Ezeiza International Airport is about 30 miles south.

Market Overview

The property market in Buenos Aires, Argentina’s capital and largest city, suffered from converging crises in 2020 — an economic recession, currency controls that reduced the buying power of real estate shoppers, and the coronavirus pandemic. Together, they left Argentine home buyers largely unable to visit and purchase properties, driving prices down and transactions to record lows.

According to a January report by ZonaProp, an online property portal, prices fell in Buenos Aires every month for the preceding 22 months, finishing a cumulative 7 percent lower at the end of 2020 than at the beginning. The report estimated the average price for an apartment in January was $235 a square foot.

Prices vary broadly in this city of about 3 million residents. ZonaProp figures for January show a nearly sevenfold difference between Puerto Madero, the sleek port district bordering the Río de la Plata, where prices were $535 a square foot, and the least expensive area, in the southwest, where they averaged $79 a square foot.

A balcony off the living and dining rooms overlooks the Plaza Alemania in the Bosques de Palermo, Buenos Aires’s largest park.Credit…Adriana Massa Sotheby’s International Realty

While transactions fell sharply in 2020, not every sector languished. While Buenos Aires’s lockdown, from March through November, curtailed property tours, it also shifted buyers’ interest from the city to roomier homes in gated communities in the northern suburbs, said Herman Faigenbaum, managing director with Cushman & Wakefield in Argentina.

“That market has exploded,” he said, adding that the low cost of construction has made it more attractive for families to buy plots and build homes. (Mr. Faigenbaum estimated the average price for an apartment in Buenos Aires at about $167 a square foot, based on veri models used by Reporte Inmobiliario, the South American real estate portal.)

Within the city, buyers who remained active were drawn both to smaller, lower-density buildings and to larger mixed-use buildings with retail, office, commercial and amenities that resemble “a small club within the city,” Mr. Faigenbaum said. Amenity-rich complexes, which were popular years ago before losing some of their luster, are hot again, he said.

Ms. Massa said the city’s trio of chic waterfront neighborhoods — Belgrano, Recoleta and Palermo — remain in demand. And Mr. Faigenbaum added that Villa Crespo and Chacarita, adjacent to those areas, saw spillover interest. “The pandemic has really driven those pieces of real estate to become more valuable,” he said.

Overall, Ms. Massa said, sales volume at her agency withered last year, leaving “more rentals than sales.” One reason is that buyers are expecting lower prices, but in many cases sellers are holding firm, she said. A lot of property is owned outright in Argentina, or with small mortgages, reducing pressure on sellers of high-end properties to unload for fear of burdensome payments.

“When we are in this premium market, even though the apartment may be empty, owners try to defend their prices,” she said.

The 1937 building is an example of the Argentine Rationalist movement, said Adriana Massa, the CEO of Adriana Massa Sotheby’s International Realty.Credit…Adriana Massa Sotheby’s International Realty

If prices were adjusted to meet actual demand, they’d be about 20 percent lower, she said. Still, there are opportunities: “It’s a good moment to invest in Buenos Aires, because if clients make offers, maybe we can convince owners to go down in their prices.”

Another factor, Mr. Faigenbaum said, has been the market’s use of U.S. dollars — a result of the unstable Argentine peso. In 2019, the government enacted controls to limit the purchase of U.S. dollars using pesos, making dollars more expensive and setting more homes out of reach for many buyers.

“We don’t expect the purchasing power buyers have to increase in 2021,” he said, though he does expect prices to flatten out in 2021 and reverse course in 2022. “We should get to the bottom, or at least a stable bottom, in 2021,” he said. “So it should be a good year to purchase a property.”

Who Buys in Buenos Aires

Elias Kier Joffe, the managing partner of Kier Joffe, a Buenos Aires law firm, said that home buyers in Buenos Aires were about 90 percent local before the pandemic, with the remaining foreign buyers coming mostly from the U.S., Canada, Spain and Italy.

Ms. Massa estimated that about 25 percent of her buyers were foreign in recent years, mostly from the U.S., France and Brazil. Today, “far fewer” are coming from abroad, she said.

Buying Basics

Foreign buyers are not restricted from purchasing real estate in Argentina. All purchasers must register for an Argentine tax identification number, Mr. Kier Joffe said, adding that it is easy to obtain in person or from afar with a power of attorney.

Closing costs paid by the buyer include the real estate agent’s commission and a value added tax on that (totaling less than 5 percent of the purchase price), a money transfer fee of 1 to 2 percent of the purchase price, and typically half of the provincial stamp duty, because that is often split with the seller. Buyers also hisse the notary’s fee of 2 percent of the purchase price, plus the value-added tax.

The bedrooms face the back of the building, with large windows drawing in abundant sunlight. The main bedroom has oak floors and an en suite bathCredit…Adriana Massa Sotheby’s International Realty

Bank financing for home purchases in Argentina is rare, and down payments must be large, so most purchases are made in cash, Mr. Kier Joffe said. He also recommended hiring a lawyer, who will charge an hourly rate or a percentage of the purchase price, usually not more than 1 percent.

Ms. Massa said it is customary for buyers to underbid listing prices — normally about 5 percent less, though in today’s market reductions of 10 percent might be considered by sellers.

Websites

  • City of Buenos Aires: turismo.buenosaires.gob.ar

  • Museo Nacional de Bellas Artes: bellasartes.gob.ar

  • Argentina tourism: argentina.travel

Languages and Currency

Spanish; Argentine peso (1 peso = $0.01)

Taxes and Fees

Ms. Massa estimated the annual property tax for this apartment is around $2,300, with monthly maintenance fees between $500 and $700.

Contact

Adriana Massa, Adriana Massa Sotheby’s International Realty, 011-54-11-4805-3338; sothebysrealty.com

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