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Montevideo, February 17th 2019 - 17:00 UTC

Argentine construction slides and could worsen because of US dollar restrictions

Saturday, June 2nd 2012 - 03:50 UTC
Full article 43 comments
The US dollar the main currency in the real estate industry The US dollar the main currency in the real estate industry

Argentina's construction activity experienced a notable slowdown in April, the latest indicator pointing to a cooling of economic growth. Looking ahead prospects are not encouraging given the strict restrictions on US dollars, which is the main currency for real estate operations in Argentina.

Construction activity slid 5.9% on the month and was down 3.8% on the year, the national statistics agency Indec reported Thursday. That compares with gains of 6.8% on-month and 5.2% on-year reported in March.

Construction surged last year as the country saw an 8.9% expansion of GDP. Residents also poured cash into real estate amid rampant inflation, estimated by economists at an annual rate of well over 20%.

Argentines have traditionally put their money into land and durable goods as a hedge against inflation.

The central bank's latest forecast puts economic growth at 6% this year, though many economists are expecting growth to be flat or even a contraction.

Construction activity could suffer a further downfall because of the very strict control on the purchase of US dollars by the country’s Tax Office and Central bank, when most real estate transactions in Argentina are done in US dollars given the long established suspicion by common citizens of (all colour) governments’ currency value manipulation.

In related news real estate agent José Azpiroz Costa advised Argentine savers to choose to invest their money in properties as restrictions to the purchase to dollars increase, he said in a television debate.

Azpiroz Costa also revealed that the increasingly complicated task of purchasing dollars is reducing real estate operations, a key aspect of the economy”
 

Categories: Economy, Real Estate, Argentina.

Top Comments

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  • yankeeboy

    A very rich guy told me, you are never forced to buy but you can be forced to sell.
    Watch property values start to plummet as people get desperate for U$. It's hard to pay rent when you are unemployed and there is hyperinflation. I made a lot of money buying property from desperate RGs in 2001-3.

    Jun 02nd, 2012 - 11:38 am 0
  • Conqueror

    Whoops!

    Jun 02nd, 2012 - 03:09 pm 0
  • tobias

    @1

    It is in these examples that I would really like to divulge some of the salient instances of éclat in my young life... But alas, silencing people in this website for posterity with trenchant and confuting remarks is not important enough to unveil some secrets away.

    Jun 02nd, 2012 - 03:17 pm 0
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