Argentina’s real estate market situation

Abstract

Generally, financial institutions, do not lend the full amount of the asked
price for the Real Estate to prevent covering extra expenses like accumulation of
interest, unpaid repayments or judicial expenditure, in case that the borrower forfeits
its obligations. The financial assistance its limited to a value lower than the Real
Estate market price and it could vary between 70% and 80%. The borrower should
cover up brokers, lawyers, taxes, fees and expenses. If the borrower does not have the
money it should get it either from its savings or other resources. Available through
the Financial System are alternatives: simple CDs in local or foreigner currency and
negotiable bonds or shares. Some of this ways are speculative and therefore, unpredictable,
so as a result may not be enough to cover the needs. The purpose of this paper
is to find a way of saving that follows the Real Estate market prices evaluation in
the way to facilitate the acquisition. In addition, this work is convenient to manage
the risk assumed by the companies involved in the Real Estate and also allow the
participation of speculators producing a more liquid market.