In which country is Argentina’s Favorite Beach Resort?

Wednesday, October 14, 2009

Pinamar is one of Argentina’s most upscale beach towns

Dear Reader,

I reported recently on Punta del Este, and how buyers from Uruguay and Argentina drive the real estate market there. I’ve often wondered about the high number of buyers from Argentina. Specifically, I’d like to find out why so many Argentines are buying in Punta del Este, when they’ve got their own beach resorts right here in Argentina.

Spending time in Buenos Aires gave me the chance to investigate further, and compare an Argentine seashore market to Uruguay’s Punta del Este market.

I researched Argentina’s beach towns before settling on Pinamar as the best candidate to check out in person. I discounted Mar de la Plata, the most popular beach destination in Argentina. It didn’t sound particularly appealing. Swathes of high rises, beaches crammed in high season, nightclubs and fast food joints galore are not my beat.

I also didn’t think anyone looking for a “Mar de la Plata??? type of ambience would buy in Punta del Este, so it didn’t make a like-for-like comparison.

Located 250 miles south of Buenos Aires, it’s fairly easy to get to Pinamar. In summer season, trains run regularly from the capital. I chose an executive bus service, for 180 pesos ($46) return. The trip took five hours, but I figured I would see some of Argentina’s famed pampas (grasslands) en route.

The grasslands were fascinating, stretching miles in all directions to the horizon. The endless blue sky arched overhead, framing stands of trees clustered in the huge fields. Lapwings flew past, a flash of black and white. Tiny jewel-like plants in shades of purple, yellow, and emerald studded the grass.

Pinamar gets its name from a forest surrounding the town, mainly of pine trees. After a shower of rain, you can’t help but notice the scent of pine and eucalyptus in the air from the trees. It gives the entire town a clean, fresh-rinsed smell.

The beach is very long, with pale sand and a small pier. The town is unique in that it is master-planned, with no high-rises on the beach itself. The main street is paved, but many side streets are packed sand. Cars creep up on you, their tires muffled by the sand.

The hotels are small and friendly, rather than the usual anonymous chains. We stayed in a low-rise apart-hotel beside the beach. Normally I associate apart-hotels with grimy, unattractive rooms, but this was spotlessly clean, homey and overlooked the beach.

Pinamar was very Punta-esque. I recognized Punta del Este’s orderliness, cleanliness and calm comfort in Pinamar. The redbrick houses with manicured lawns…the mix of upscale boutiques, coffee shops, and Italian restaurants…and a chic yet bohemian vibe, all reminded me strongly of Punta del Este.

Then I did some calculations. If I lived in Buenos Aires year-round, and wanted a beach house, where would I choose?

In terms of travel time, it takes 4-5 hours to drive to Pinamar. A ferry from Buenos Aires to Montevideo takes 3 hours, and the drive from Montevideo to Punta takes 2 hours…or you can fly from Buenos Aires to Punta del Este’s airport in fifty minutes. That makes Punta just as accessible as Pinamar.

Punta del Este’s attractions include the Conrad Casino, a marina, and a chi-chi glamour that Pinamar can’t quite match. You’ll find a wider choice of properties in Punta del Este, too. You’ll pay around $1000 a square meter on average in Pinamar for properties that don’t have an ocean-view. In Punta del Este, you’ll find many similar properties for less than $1000 a square meter…an online search shows 2 houses for $500 a square meter, a third for $750 a square meter, another for $800 a square meter…out of only nineteen non-ocean view houses (the remainder averaged $1000 a square meter).

So property prices are comparable, if not slightly in favor of Punta del Este.

In Pinamar, a two-bedroom, two-bath 80 square meter house five blocks from the beach was $80,000. A centrally located 85 square meter apartment was $90,000; along with three bedrooms and two bathrooms, it had covered parking. An apartment fifty meters from the ocean, 125 square meters, was $150,000. A larger 200 square meter house was $250,000. Newly renovated, it had three bedrooms, three bathrooms, and a garage.

Punta del Este wins hands-down as a safe haven for assets. It attracts more tourists, many of whom want to rent a house or apartment rather than stay in a hotel, increasing rental potential.

Many Argentines also invest in Uruguay. They remember the collapse of the peso in Argentina in the 2002, when the government froze bank accounts, and they watched their savings fall in value. And it’s not just the ultra-wealthy; middle-class Argentines like having their investments beyond the reach of their government, too.

Punta del Este’s attractions…the casino, the marina, the partying nightlife, and the visiting celebrities… all increase the desirability of Punta del Este. That desirability means more people want to buy property there…which explains why property prices in Punta del Este remained buoyant in 2008, despite the world economic slowdown.

Much as I liked Pinamar, I preferred Punta del Este. So it’s not surprising to me that Punta del Este is “Argentina’s??? favorite beach resort.

Margaret Summerfield

PS: In my next report, we’ll take a look at the big picture with respect to Argentina’s real estate market.