21 June 2002

Abrupt halt to market

ARGENTINAS shock early exit from the World Cup will no doubt add to the cloud of economic gloom covering the nation which has had a significant impact on the countrys land market.

According to Claudio Mejia, of agency MLB Negocios Rurales, which last year was flagging the sale of several substantial farms, the market has ground to a halt in the wake of the near-collapse of the national economy. Inflation is running at 15%/month and half the population is reportedly living below the poverty line.

"Since last December, land prices have fallen by at least 30%. Since the middle of 1998, when prices were at their decade peak, values have turned down 50% plus."

Deals have been scarce, leading to Mr Mejia basing his valuations largely on rental income and assumptions derived from available statistics.

But, with values much lower than the 10-year average, Argentinas farms and ranches are now attracting cautious, opportunist interest from investors from the US and European countries including Spain, Germany, Italy, Belgium and Switzerland, he says.

If and when the dust settles and the country begins to recover, a strong buyers market is anticipated. &#42