The Practice of Real Estate in Argentina
The real estate brokerage industry in Argentina has two types of practitioners. Most of the people in the formal real estate industry are highly trained and extremely professional. Unfortunately, there are still a few “coyotes”. These are mostly part time agents who represent themselves in the transaction and are basically scrambling to make a commission.
Properly practicing real estate in South America requires not only a great deal of skill it requires a sharp intuition and a creative mind. Think of the process as building a modern building with prehistoric tools. We are used to a functioning MLS with comparables and accurate information. We are used to easy access to accurate public records of past transactions.
The records of past transactions in much of the world do not accurately reflect what happened in the settlement. In order to avoid taxes, part of the purchase price is often transferred outside of the formal transaction. Imagine how this affects the appraisal process. Appraisers try to talk to as many people as possible to determine what happened in the settlement. They compare the sales prices they trust to the offering price. Offerings are used as comparables and the ratio obtained on the trusted transactions is applied to the offering price. This is considered more accurate that the recorded information.
The lack of a formal MLS hampers the agent’s abilities to obtain exclusive listings. Many of the franchise companies have set up private MLSs and are using them as a way to obtain exclusive listings. In Buenos Aires the rudiments of a formal MLS are in place. The hinterlands are still a no-mans land where the agents all take the same listing and race to see who collects a commission.
New properties are favored above used properties by owner occupants. For this reason developers are the best buyers for used and especially free-standing homes. They are also the best clients for agents who want loyal clients that value their services.
The Smithsonian Magazine has published an article on the rebirth of Buenos Aires. That will be reviewed in my next post. http://www.smithsonianmag.com/travel/Hola-Buenos-Aires.html
David Segrest, CIPS, CCIM, CEA, TRC
Corporate responsibility for property players
It is not only ethically correct to take responsibility beyond laws and regulations: it can also be profitable.
Recently Aspelin Ramm and Evotek signed a deal with the Church City Mission about energy saving. The agreement fits into a wide range of community initiatives from Aspelin’s platform.
The privately held real estate company uses a portion of time and money on good quality, fine architecture and general social responsibility. It does this because it believes it is correct, but Marketing Director, Sverre Landmark, is convinced that there are also economic returns to investment in diversity.
He is concerned that the talented people emphasize the business value basis. You get to grips with, and retain, the best people. If one takes social responsibility seriously, one also becomes better at what you one is doing. Moreover, you get good will among key agencies in the planning and building authorities. In addition – like everything else – social responsibility and commitment to manage customers and investors’ choices.
Real Estate Blog International Welcomes Nancy Wiggins!
Nancy will be discussing Serbia
With more than 25 years experience in commercial real estate research, planning, appraisal and brokerage, Nancy Wiggins holds real estate brokerage licenses in both North and South Carolina as well as the prestigious designations of CCIM and CIPS. Active in community affairs, Nancy has a long history of philanthropic public service.Nancy is the Managing Director both Nancy Wiggins Commercial Real Estate,Charlotte, & AND HOLDING,d.o.o in Belgrade. In addition to her extensive commercial real estate experience, Nancy Wiggins distinguished career includes:
Designee Certified International Property Specialists Network, NAR; Designee, CCIM
Commissioner, Charlotte-Mecklenburg Planning Commission [1994- 1999]
Former Trustee, Global Housing Foundation, Affiliated with the UN
Past President, International Committee for Professional & Student Exchanges, FIABCI, Paris
Former Trustee, FIABCI Educational Foundation
Past Board Member FIABCI-USA
Past member of the Board Directors, NC CCIM Chapter
Past Member, International Relations Committee & Review Board of Commercial Investment Real Estate , CCIM Institute, Chicago, Il.
Member, Charlotte Region Commercial Board of Realtors
Member, Multi-Million Dollar Club [CRCBR]
Past President, North Carolina Association of Appraisers
Listed Who’s Who in America, Who’s Who in the World
& Who’s Who in Finance & Industry
Special Scholar- [U of Michigan] Institute of Political & Social Research
Master of Arts, University of Texas
Headed by Nancy Wiggins as President, N began its history in 1984 as Bowen-Wiggins Company, later merging with WRB, Inc and in 1996 emerging as Nancy Wiggins Commercial Real Estate. Nancy has been involved in European Transactions since 2000 and Central American Tranactions since 1998. The firm’s track record reflects the success that experience, knowledge and hard work have earned. Nancy’s accomplishments include:
Brokering over $100 million in commercial sales & leases in Hospitality & Special Uses;Multifamily; Senior Care & Medical Centers; Office Spaces & Complexes; Institutional facilities/Campuses; Retail -Single Tenant, SC ,Outlets & Malls; Mixed Use Developments;Recreation; Government Facilities; & Land for International, National & Local Clients be they Fortune 100 Companies[end users] , Investors or SBA start ups.
Authoring professional journal articles as well as completing over 1000 Market Feasibility/Penetration/Site Selection Studies/Analyzes for Public and Private Clients worldwide. Nancy is a HUD approved Researcher.
Consulting & Professional Speaker by providing confidential services for clients as well as speeches and seminars to professional and university audiences worldwide.
www.nwcre.com
Argentina: Doing Real Estate in Tango Land
First thing: Argentina must be seen as two countries. There is Buenos Aires and there is “The Hinterland”. The laws are the same. The culture and the practices are very different. For today we will talk about the law. Argentina has a federal law concerning property; but there are variations in the provinces and municipalities.
The Spanish word for real estate is “bienes raices”. This means “assets with roots”. The laws concerning brokerage of assets also apply to brokerage of real estate. One does not have to be licensed to broker real estate in Argentina. An unlicensed broker cannot sue for a commission. Licensing is obtained by attending the “Colegio de Corredores y Martilleros” The course is extensive and detailed. Not only do the attendees learn the legal aspects of brokerage and auctioneering (Martilleros are auctioneers); but they learn the actual practice of the business. The books used in the course of study are available in Spanish from Bienes Raices Ediciones at http://www.brediciones.com/ . They are extremely well written in Argentine Spanish.
Argentina, like other Latin countries uses civil law. In the USA we use Common law except in Louisiana. Civil law is based in statute. Common law is based in precedent. One can look at the law book and say, “this is how it is”. With common law one has to study court cases. Contracts in civil law countries are shorter because they refer to statutes to deal with the different provisions. In common law countries every eventuality must be dealt with in detail.
Transactions are completed (settled) by a Scribano in Argentina. This is the same as a Notario in most Latin countries. Scribanos are attorneys who are specially appointed to handle official matters. In addition to closing the transaction, they maintain the public records and examine the title. Title insurance and mortgages are the exception rather than the rule in Argentina; but this is changing in Buenos Aires. More and more people are using mortgages. Many of the mortgage companies are requiring title insurance.
The next post will discuss the practice of real estate and the transparency issues that cloud the evaluation and examination of properties.
David Segrest, CIPS, CCIM, CEA, TRC
Greater Toronto Resale Housing Sales Up in First Half of May
As I mentioned in this Blog before, the past few weeks have been crazy busy with lots of sales, multiple offers and activity at Open Houses. There is a real shortage of listings because most sellers feel that there is no market but as you can tell from this Press Release from the Toronto Real Estate Board, the first half of this month has been very active:
TORONTO, May 19, 2009 – Greater Toronto REALTORS® reported 4,561 transactions in the first half of May – an increase of three per cent compared to May 2008. Read more
Despite Energy Reserves, Norway Slips Into Recession
The slowdown in global economic activity has tipped Norway into recession, despite the country’s deep oil reserves and strong budget position.
Gross domestic product for Norway, excluding petroleum-related activity, contracted by 1 percent during the first quarter of 2009 from the previous quarter, when it declined 0.8 percent, Statistics Norway, the country’s data agency, said on Tuesday.
That met the generally accepted definition of a recession — two consecutive quarters of contractions — for the first time since 1993. The economy of Norway expanded last year by 2.6 percent and by 6.1 percent in 2007.
Including oil-related activity, the contraction during the first quarter of 2009 was a more moderate 0.4 percent.
Continued investments in the energy industry have cushioned the effect of the global recession in Norway, which is not a member of the European Union. The state profits from oil and natural gas both through taxes imposed on production from its offshore fields and from direct investment in petroleum projects.
But aspects of the financial crisis are starting to be felt in the country, which has 4.6 million people. Tighter access to loans and higher costs of credit are stalling business investments.
Interest rate increases in 2007 and 2008, amid a significant buildup of personal debt, led to a damping of household consumption and residential investments, said Kyrre Aamdal, an analyst at DnB NOR, a financial services firm in Oslo.
Norway’s central bank has cut its benchmark interest rate to 1.5 percent, from 5.75 percent in October, and signaled the rate might fall as low as 1 percent later this year.
The relatively high levels of personal indebtedness make the economy particularly responsive to rate moves, Mr. Aamdal said.
Last week, the government said it would spend more of its oil wealth this year to help stimulate the economy and create jobs. The coalition government said in a revised 2009 budget presentation that it would increase central government spending of oil revenue by 9.5 billion kroner ($1.48 billion), to about 130 billion kroner, roughly 15 percent of total government expenditures for 2009.
Over all, the real underlying growth in government expenditures is now expected to be 6.75 percent in 2009, up from the 3.25 percent projection in the original budget for 2009.
The government still enjoys a healthy budget surplus, and its ledger is virtually free of debt.
The decline in Norwegian growth is still moderate compared with the contractions among other European economies. By comparison, the American economy, in recession since December 2007, contracted at an annual rate of 6.1 percent in the first quarter.
New Construction Market 2009-2010
The Norwegian Home Builders and Contractors Association (BNL) had previously indicated a decline of 30-40 billion due to the crisis. It will involve 30 000 fewer jobs in the construction industry in 2009, and 60 000 fewer in the value chain, considering the ripple effects.
CEO Ketil Lyng in BNL pointed out that the bailout billion from the government will be useful, but that it’s crucial for the development of how the bank package will work in the longer term. This is because banks are required to finance the existing market despite the decline, be it housing, commercial buildings or facilities, and because the construction industry is dependent on either that business or on getting financing for its normal business.
- “If American business stops, it does not help us get some emergency billion, Lyng said at the seminar ” New Construction Market 2009-2010” 22. January 2009.
Housing Manufacturer’s Association asked its members about the reason why many planned housing developments are still not implemented. There is a lack of funding. In fact, there are almost twice as many housing projects that are being stopped due to lack of funding, as there are deals to be signed. The ratio at the end of January 2009 was 1.7%. One consolation, though poor, is that this figure last fall was over in four periods.
- “Despite the fact that this figure is declining, there are still more homes that are stopped due to lack of funding than the number of homes being sold,”said managing director Per Jæger in Home Builders and Contractors Association.
Kjell-Torgeir Skjetne, director of analysis and economy in Kommunenes sentralforbund (KS) pointed out that if one obtains financing, there are plenty of projects to go for.
- “A broad survey Multiconsult performed for us in 2008 showed a maintenance backlog of existing buildings at 94 billion. If you include the need for reinvestment, and major upgrades, increase the amount to 142 billion,” said Skjetne.
Director Mikkel Vogt in Storebrand Bank pointed out that banks have lent out a lot of money to the commercial sector already.
- “It is not without reason that the banks are worried about the position. A completely normal loss ratio up to 2.5 percent of gross loans, means losses ranging upwards of 25 billion dollars for commercial real estate,” says Vogt.
He notes that banks are trying to slim balance sheets starting with corporate loans more than other loans, commercial more than other industries and new buildings more than refinancing.
CREA: MLS® Home Sales Forecast Revised
Since the middle of April, the Real Estate Market has shifted again. Being so caught up in the Toronto market, it is hard to extend your thoughts into the rest of Canada but last week the Canadian Real Estate Association revised their forecast for the upcoming year. The trend seems to be not only Downtown Toronto based. Here is their recent Press Release:
OTTAWA – May 14th, 2009 – A Spring housing market that was more active than anticipated has prompted a change to the MLS® home sales forecast issued by The Canadian Real Estate Association for the rest of 2009, and for 2010.
National home sales activity is forecast to be down 14.7 per cent to 370,500 units in 2009. This is slightly less than the reduction in activity predicted in CREA’s forecast issued last February. The forecast decline in annual activity was trimmed to reflect a stronger than expected rebound in activity in British Columbia and Ontario in the first quarter of 2009. Forecast declines in annual activity were reduced for these provinces.
They were also shaved for Manitoba, Quebec, New Brunswick, and Prince Edward Island to reflect stabilizing trends in sales activity in these provinces.
National MLS® home sales activity is forecast to rebound by 7.2 per cent to 397,000 units in 2010. This is a slightly weaker rebound than predicted in CREA’s previous
forecast. The revision reflects recently downgraded forecasts for economic growth next year. The rebound in activity in 2010 is forecast to be biggest in British Columbia and Alberta.
New listings on MLS® systems in British Columbia, Alberta and Ontario are forecast to continue easing following the peak reached last year. New listings are also expected to shrink in Saskatchewan, Quebec, New Brunswick, and Nova Scotia. Fewer new listings will further stabilize the resale housing market as sales activity draws down inventories. The national MLS® average home price is forecast to decrease 5.2 per cent in 2009, led by average price declines in British Columbia and Alberta. By contrast, the average home price is forecast to rise in Manitoba (4.3 per cent), Price Edward Island (4.2 per cent) and Newfoundland & Labrador (10.9 per cent).
CREA’s previous forecast predicted a decline in the national average price of eight per cent in 2009. The price trend is similar but less dramatic for the weighted national MLS® average price, which compensates for changes in provincial sales activity by taking into account provincial proportions of privately owned housing stock. The weighted national MLS® average price is forecast to decline 3.6 per cent in 2009, and hold steady in 2010.
CREA’s previous forecast predicted the weighted national average price for MLS® homes sales would decline by 6.4 per cent. “Monthly resale housing activity improved as the first quarter progressed, entering the second quarter on a rising trend and closing in on levels last seen before it fell sharply late last year,” said CREA Chief Economist Gregory Klump. “It will take time for housing inventories to be drawn down enough to put new home construction on a stronger footing, but the balance between resale housing supply and demand is improving in a number of major markets. The national average price has begun to rebound from the
recent low reached in January, and is forecast to begin rising modestly above year-ago levels in the fourth quarter of 2009.”
Reposted from: http://torontoism.com/2009/05/16/crea-mls%c2%ae-home-sales-forecast-revised/
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