Palermo, a continually evolving neighborhood in Buenos Aires, is experiencing a surge in property values, particularly in its southern microzone. The area, increasingly popular with students and young professionals, is attracting both renters and investors seeking opportunities within the vibrant district.
Palermo isn’t a single entity, but rather a collection of distinct micro-neighborhoods, including Palermo Chico, Nuevo Palermo, Palermo Viejo, Palermo Soho, Palermo Hollywood and Las Cañitas. More recently, fresh sub-districts have emerged with increasingly distinctive names. Palermo Freud, for example, gained its moniker from the high concentration of psychologists with practices in the area. Palermo Italia, bordered by Gorriti Street between Dorrego and Humboldt, is known for its Italian restaurants, while Palermo Sur, or the university district, is gaining traction.
Palermo Sur, located on the southern edge of the neighborhood bordering Almagro, and defined by Soler, Scalabrini Ortiz, Córdoba and Gallo streets, has seen property values steadily increase for the third consecutive year. According to a report by Reporte Inmobiliario, the average price per square meter in the area now reaches USD $3684, a 4.36% increase compared to 2024. This growth reflects a broader trend of rising real estate costs in desirable Buenos Aires locations.
The price of parking spaces in Palermo Sur has also seen significant growth, increasing by 16.67% year-over-year, from an average of USD $30,000 last year to USD $35,000 currently. This increase suggests strong demand for convenient parking in the densely populated area.
A key driver of this growth is the area’s appeal to students, drawn by the concentration of educational institutions. “The universities are a magnet for these locations, and the University of Palermo attracts people from all over the country,” says Gabriel Brodsky, CEO of Predial, a developer with projects in the area. The presence of a large student population fuels demand for both rental properties and supporting businesses.
The real estate growth is also being fueled by the area’s expanding culinary scene and nightlife. “The presence of students encourages the creation of commercial and gastronomic businesses geared towards this audience, such as cafes, bookstores and study spaces, which in turn boosts the economy,” adds Agustín Walger, director of Lepore Propiedades. This creates a positive feedback loop, attracting further investment and development.
“Palermo has a certain appeal, and this microzone attracts people who can’t afford central Palermo but still want to live in the neighborhood,” Brodsky explains. This demand is reflected in the pricing of properties within Palermo Sur.
New construction in Palermo Sur is priced slightly higher than in Palermo Soho (USD $3674) and Palermo Freud (USD $3571) per square meter, but remains below prices in Palermo Hollywood (USD $3773), Cañitas (USD $4350) and Palermo Nuevo (USD $5555). In comparison, Almagro, a neighboring district, sees prices 19% lower, at USD $2979 per square meter, according to Reporte Inmobiliario.
the average price per square meter for new construction across Palermo is USD $3893, for off-plan properties USD $3976, and for existing properties USD $3035, according to the November Index from Zonaprop. These figures position Palermo as the second most expensive neighborhood in Buenos Aires, after Puerto Madero.
“Market prices will continue to rise. Today we are selling at values from 10 years ago in a world that has inflated, at least 40% in dollars over the last 10 years,” Brodsky states, adding that “sales are good in this area, and there is an increasing public.”
The number of construction projects in Palermo Sur has remained stable over the past four years, following a sharp decline in 2021 when construction work decreased from 66 to 47 projects, totaling approximately 100,091 square meters under construction. “That’s 54,000 square meters less than in 2021, but similar levels to recent years,” clarifies Germán Gomez Picasso, director of Reporte Inmobiliario.
The platform’s report details that of the total projects, 17 were recently initiated and have less than 5% construction progress. “Being located near universities, the most abundant typologies are studios, followed by two-room apartments, and finally three-room apartments, which appear in a more reduced form,” Gomez Picasso adds.
These constructions target two key demographics: end consumers, typically young people and couples, and investors looking to purchase property for rental income. Walger, of Lepore, estimates that the estimated annual rental yield is between 5% and 7% in dollars. “Many people buy as an investment, because you are in Palermo but you don’t pay per square meter at such a high price and you can rent it better than in Villa Crespo or Almagro,” Brodsky comments.
Finally, demand is divided into three types of tenants: “University students – from Buenos Aires or other provinces – looking for proximity to educational centers; hospital tourism, due to the proximity of the Sanatorio Güemes, Sanatorio Finochietto and the Hospital Gutiérrez de Niños; and, finally, vacation tourism, attracted by the cultural and gastronomic offer of Palermo,” concludes the director of Lepore, a company that has 23 developments in the area.
