Part 1: Vineyard Estates for Pennies on the Dollar

Argentina conjures up many images when people hear the name.  Gauchos riding the wide-open pampas, delicious steaks, crazy economic cycles, and of course... phenomenal wines.  For the savvy real estate investor, it should also awaken a sense of value, deep value and tremendous opportunity.  Buy, hold and enjoy opportunities abound, especially for people who have always dreamed of owning a vineyard estate, but find the astronomical price tags in Canada out of range or hard to justify.   

The Argentinian economy is a tough pill for many investors to swallow.  Yes, Argentina cycles in and out of economic crisis.  For example, in the past decade, GDP growth has been in positive territory four times and negative five times.  Inflation has averaged 144% since WWII and is over 50% in 2019.  The currency devalues regularly.   The Argentine Peso (ARS), worth about 5 to 1 USD in 2015.   This year it’s trading at 74 ARS to 1 USD (as of Sept 2020).   

Of course, this is bad news for any business tied to the local economy of Argentina.  But for a savvy foreign buyer, the timing couldn’t be better.  Using dollars to buy, hold, and maintain property in Argentina means using strong dollars to do so.  So, for investors who see opportunity, the next factor to consider is what kinds of properties are there and constitute an exceptional value.    

For many, the wine growing regions of the country stand out.  To be able to own a vineyard property similar in climate, geography, and feel to those back home in Napa or the Okanagan Valley, but to only invest a fraction of the cost is exciting.  Dan Anderson, a real estate professional from Kelowna summed it up this way, “The Okanagan Valley has become overpopulated and the traffic is very congested compared to the countryside of Argentina. The regulations and the red tape are getting harder and harder to get through and has become overbearing actually.”

While a small estate in and around Napa and Kelowna may run in the millions, a 64-acre producing vineyard property in the up and coming region of San Rafael, Argentina runs about $145K.  A larger 264-acre ranch is listed at $526K.  While San Rafael isn’t as famous as its northern neighbor, Mendoza, for investors looking for deep value affordable larger properties, this is the region to consider.

For investors who want to own an estate in a more refined and established region, Mendoza’s Uco Valley presents the highest value and most sophisticated choices.    Mendoza produces the best wines in Argentina and is home to the wineries of Paul Hobbs, Susana Balboa, Bono, and the Rothschilds to name a few.  The soils and climate are exceptional for the production of grapes that yield the finest wines on the planet.  
Vineyard by David Köhler is licensed under Unsplash License

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