Wednesday, December 8

The United States remains a magnet for Argentine investors


Balance 2021

The COVID-19 pandemic claimed the lives of more than 5 million people, and dragged the global economy into a sharp economic contraction. According to Reuters, the US economy contracted at an annual rate of 10.2% from the fourth quarter of 2019 to the second quarter of 2020. However, the recovery rate was staggering and historic.

The mandatory closures of non-essential businesses in March 2020 caused the unemployment rate to rise, but actions were very quickly taken to reverse this situation, and it is currently at very low levels, close to pre-pandemic rates. Standing according to official federal data from the United States at 4.8% for the month of September 2021, the lowest since before the start of the pandemic. The economic recovery was very accelerated thanks to the government’s aid of US $ 6 trillion, a massive fiscal stimulus, the injection of money into the economy by the Federal Reserve, and the effective vaccination plan.

GDP sank 31.4% in the second quarter of 2020, but immediately grew 33.4% in the third quarter. In the first quarter of 2021, the United States economy grew at an annual rate of 6.3%, and the GDP of US $ 22.04 billion exceeding the US $ 21.69 billion in the fourth quarter of 2019. The second quarter of 2021 grew 6.5% per year, and the third 2%, according to the Bureau of Economic Analysis. Economists and the International Monetary Fund predict a 7% annual increase this year, which would be the strongest performance since 1984.

Specifically in the real estate sector, according to the National Association of Realtors, between April 2020 and March 2021 there were US $ 54.4 billion in purchases of residential properties by foreign investors, where the main buyers were from Canada , Mexico, China, India and the United Kingdom, with an average purchase price of US $ 351,800. 65% acquired properties in a suburban area; and 42% of foreign buyers bought a property for vacation use or for rent, or both.

According to Fortune, the housing market experienced strong growth during COVID-19, supported by remote working and low mortgage rates induced by the pandemic. It spawned an unprecedented wave of homebuyer demographics. Since the start of the crisis, median list prices for homes have risen 23%.

As tourism was affected during the pandemic, properties that were used for the sole purpose of generating tourist income were impacted. Arrivals to the United States plummeted, from around 5.8 million a month before the pandemic to 250,000 in April 2020. Since then, arrivals to the country have slowly recovered, reaching 1.4 million in April 2021 Latin Americans were the ones who quickly resumed trips to the USA, reaching 45% of the pre-pandemic levels.

During 2021, Florida continued to be the most popular destination for real estate investment, with 21% of foreign buyers acquiring a property in the state, of which 34% were Latin American. Argentina is in the top 10 countries that buy property in the United States. Other important investment destinations were North Carolina, Georgia, Ohio, Michigan, California, Texas, Arizona, New York, and New Jersey.

Regarding the use of properties acquired by foreign buyers, 42% did so to use it as a vacation home and rental property; and 19% for non-residential use. There was a greater preference for condos among foreigners living outside the USA, exactly 19% favored this option, compared to 11% of foreigners residing in the country.

According to Realtor.com, the market is moving in favor of buyers. As travel has become easier, property values ​​will increase. For its part, CoreLogic maintains that house prices have increased by 18.1% in August 2021, compared to August 2020.

2022 projections

According to Forbes, the market is predicted to remain strong for the final months of 2021, but will adjust to be more buyer-friendly, creating opportunities for buyers and sellers looking to 2022. Nathaniel Lee of CNBC joins these predictions, stating that the market heading to 2022 will be more of a ‘boom’ than a bubble.

In the same vein, Reuters’ Hari Kishan argues that US home price increases will slow down next year, halving the double-digit pace of 2021, but rising further. faster than what was initially predicted. During 2020 and 2021, home prices rose and there were problems obtaining essential materials for construction, which resulted in a 30% drop in new home sales. Now the market is on the move again, hinting at a near-normal 2022, with more stable production and supply to meet strong demand for homes, but with more typical levels of price appreciation.

Investment possibilities for Argentines remain strong. Despite the pandemic, the country’s economic situation led many to continue looking for options abroad, to be able to put their savings into an asset, and generate an income in dollars that allows them to face that crisis.

In 2022, the possibilities remain latent for the Argentine investor, with investment options in different states, especially in those already mentioned as favorites, such as Florida, Texas, and Georgia, and also in different types of project, particularly in condominiums, hotels and residential. Commercial properties will regain popularity in 2022, despite having slipped into the background in 2021.

Added to this is the flexibility to travel that will be reborn with more power in 2022. During the previous two years, distance was installed as a natural way of dealing with business. As a real estate developer in the US, we are prepared to welcome potential buyers who during the pandemic had no choice but to buy remotely. The majority, however, accepted this modality and adopted it as a standard, and understood that it is possible to make an investment from abroad. But those who prefer to travel to the United States to close the operation in person, can now do so.

Buyers who walked away from the market in 2021 because of high prices are waiting until 2022 to make the leap and re-enter the market. As reported in Fortune, John Burns Real Estate Consulting and Freddie Mac projected growth in property values ​​of 4% and 5.3%, respectively, in 2022.

Economic growth that began in the third quarter of 2020 will continue in 2022. The Federal Reserve’s forecast of real economic growth in the US for next year is 3.3%. Everything indicates that the context in this country and in the world, at the end of the pandemic, is favorable for all types of Argentine investors who want to trust their savings in a safe and profitable project in the short term. The Real Estate sector continues to be at the fore in business and investment matters, with its different variants, and the USA continues to be the indicated country to bet on these short and long-term projects.

Konnectia Holder



www.ambito.com

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