Argentine Real Estate market to go down 50%

[steveinbsas]

Thanks Nik and Steve, but it's actually the electricity that I'm stuck at T2 on...we hardly use any but it's got a fixed base rate from the previous owner. Now the bill's in my name, but I have to wait till one year's up before having my consumption certified.
Sorry to bore everyone, it's not related to the thread but a big caution to buyers re. expenses. My lawyers assured me the property would cost almost nothing to run!

That's an awful lot to pay for electricity.

At least it wasn't your ABL and there is something you can do about it.

There is so much that some-but not all-of the lawyers and real estate agents fail to tell their clients...or just get "wrong" in the first place...and it's always at the expense of the client.

 

[Stanexpat]

Thanks Nik and Steve, but it's actually the electricity that I'm stuck at T2 on...we hardly use any but it's got a fixed base rate from the previous owner. Now the bill's in my name, but I have to wait till one year's up before having my consumption certified.
Sorry to bore everyone, it's not related to the thread but a big caution to buyers re. expenses. My lawyers assured me the property would cost almost nothing to run!

I had a similar problem on my house there. After moving into my house we discovered that the electric rate being charged was for industrial users. There was a very bureaucratic process to get it changed. It involved hiring an electrician to do a survey of the property and filling out many forms. Total cost when this was completed was about $500. A minor scam for there as it would seem obvious to most that my house was not a factory.

 

[jp]

Don't bet on it, especially with inflation.
...

Money in the brick usually beats money in the bank, at least in Argentina.

GBP dropped around 25% against the peso this year. Not good, and needs to rectify. Peso is over valued and long overdue a correction. More a question of "when" than "if" IMO

I'm banking on the exchange rate normalising, and a lack of demand giving me a little more leverage, especially on a some of the new builds that sprung up whilst it looked liked there would be high demand.

There's still some bargains about now, but its not exactly a buyers market. Least of all with GBP...

 

[nikad]

Thanks Nik and Steve, but it's actually the electricity that I'm stuck at T2 on...we hardly use any but it's got a fixed base rate from the previous owner. Now the bill's in my name, but I have to wait till one year's up before having my consumption certified.
Sorry to bore everyone, it's not related to the thread but a big caution to buyers re. expenses. My lawyers assured me the property would cost almost nothing to run!

Celia, you are being ripped off, you should file a complaint at Consumers´Defense, you will get reimbursed and indemnified if you do so. You have a rental contract from day zero, it doesn´t matter if the bill went under your name just recently, they are giving you b****t when they say you must wait a year. It is the perfect time to make it into the CD office in the downtown ( less traffic and ppl )

 

[Celia]

It is the perfect time to make it into the CD office in the downtown ( less traffic and ppl )

Thanks for the advice, do you know the address or argentine name of CD so I can google the whereabouts?

 

[nikad]

Thanks for the advice, do you know the address or argentine name of CD so I can google the whereabouts?

Sure thing, here you have all the info ( in Spanish ) it explains how to file a claim, etc.

http://www.buenosaires.gov.ar/areas/produccion/def_consumidor/?menu_id=174

Then here http://www.buenosaires.gov.ar/areas/produccion/def_consumidor/cgp/cgp.php?menu_id=23740
you have all the places you can go in each neighborhood to file a claim.

Remember to take a copy or your rental contract, and the bills and any other useful info you might have.

nik

 

[bigbadwolf]

GBP dropped around 25% against the peso this year. Not good, and needs to rectify....

I'm banking on the exchange rate normalising,

I hope you're not depending on the GBP recovering: I don't believe it will happen. A year ago I started to read forecasts of euro-GBP parity and this has just about materialised. The British economy is in even worse shape than the US economy.

 

[Ries]

In any city, desirable real estate is pretty stable.
There are just too many people on the planet with money these days.
Thats not to say that there arent bubbles, and that prices dont go down as well as up- but, even in this market, a one bedroom apartment in NYC in a good neighborhood is still costing $600,000. The really nice houses in LA or SF or Seattle are down, yes, but nowhere near 50%.
Same with Paris or London.

It is true that fools who think they can double their money in 2 years in these markets are finding out differently.

In BsAs, the quality, older units in good neighborhoods are not gonna drop 50%. They just may not go UP 25% a year.

And the really nice, older apartments in Recoleta, or Palermo, are still incredible screaming bargains when compared to similar places in other cities of 4 Million people, worldwide.
Show me a flat in London, or Madrid, or San Francisco, or Tokyo, with 4 meter ceilings, hardwood floors, stained glass, 150 sq meters or so, with a doorman, a lobby with marble and brass, that sells for $250,000 US. Or even $500,000 US.
And yet, savvy shoppers can still find places like that, with incredible character and detailing, in very good neighborhoods in BsAs.
A one car garage stall can go for that much in SF or NYC, easily, in the right neighborhood.

What I would be hesitant to buy, is the brand new, ice cube tray, shoddily built condos in places like Palermo Hollywood. These things are cheap, quickly built, and won't age well. Interiors are basic, low quality finishes, cabinets are particleboard, everything is as cheap as it can be. They are NOT gonna be the high priced, desirable locations in 5 or 10 years- Juan B Justo is loud and dirty, there is none of the old charm of Recoleta or San Telmo.

In any market, the places people want to live hold their value, while the quick speculative frenzy fades.

 

[steveinbsas]

Thanks, Ries....another great post!

Nonetheless, weren't you being a bit facetious about a one car garage stall going for as much as $250,000 $500,000 in SF or NYC?

 

[DanP]

What I would be hesitant to buy, is the brand new, ice cube tray, shoddily built condos in places like Palermo Hollywood. These things are cheap, quickly built, and won't age well. Interiors are basic, low quality finishes, cabinets are particleboard, everything is as cheap as it can be. They are NOT gonna be the high priced, desirable locations in 5 or 10 years- Juan B Justo is loud and dirty, there is none of the old charm of Recoleta or San Telmo.

In any market, the places people want to live hold their value, while the quick speculative frenzy fades.

I'm not currently in the market to buy (perhaps in the future), but I hadn't thought about these new units in those terms. I can definitely see the potential for that kind of depreciation, although a good friend lives in a brand new building in Palermo Hollywood that is quite nice. Shiny hardwood floors, gorgeous backyard space.

He's renting, which seems to be the best way to go about things for now, at least, especially if you can get your hands on a guarantia. I understand the argument that "bricks and mortar" is the safest place to put your money in Argentina... but the majority of the posters on this board aren't Argentine. Personally, I'd rather have my money in the States.

Disclaimer: I recently had an Argentine friend describe the 2001 crisis in detail, and it sounded terrifying.