Argentines start bringing their money home

[bigbadwolf]

What is stopping the Banking system in USA from not collapsing and people not accessing their money?

The US both can and is willing to create more money to shore up the banks and protect bank accounts. Granted, this creates more inflation and/or is a subsequent burden to tax payers.

What happened in Argentina in 2001 can happen anywhere as proven just this week with a country that was rated with the highest standard of living and now is Bankrupt.

But not to the USA: it can print more dollars. An options that wasn't open to Argentina as its foreign debt wasn't denominated in pesos.

 

[tangobob]

They are bringing their money back to buy property, not to leave it in the bank.

The down side of this of course is that property can go down, look what is happening in the US and GB.

You can of course argue that it is unlikely to happen here as prices are not based on how much credit you can get, but as happened before if the only place people keep their money is in property and the banks collapse then suddenly everyone sells to liquidise.

We're all dooomed

 

[perry]

In 1999 in Buenos Aires prices were cheaper in many areas than in 2002 one year after the crash when there was a huge resurgence of prices in the Capital Federal.
In the 1990s when Argentines were earning dollars and getting paid wages higher than ever before prices of property were around 30 to 50 percent of today. In the Palermo District especially Palermo Viejo houses were 300 to 500 dollars a square metre.
What happened after the crash immediately was a freeze of assets in Banks causing some people to panic and sell their properties cheap . This happened more in the suburbs and much less in Barrio Norte and Recoleta.
In 2002 the property Boom started here fueled by Argentines monies that had now had no faith in the Banking System. The biggest boom was in Palermo Viejo then a red light area that started to see a transformation. Beautiful Italianlite houses were converted into new restaurants and designer shops. In 2002 prices for Houses there were around 500 dollars a square metre which were the same all though the 1990s . Palermo Viejo was a area shunned for years and considered to be undesirable until some pioneering people decided that it was the place to put their monies into.

One of the first restaurants there was Janio on the corner of Malabia and Costa Rica and then others started to open. Now there are over 500 restaurants and cafes and over 1000 designer shops catering to the local and international markets.

Going back to 1995 to 1999 when Buenos Aires was awash with dollars and people were earning very high wages prices of property were very low in this neighbourhood. It like many areas of the capital eg San Telmo. Barrio Norte were the same.

In Argentina most people will only invest in property and there are families that own 10 or more properties in the Capital Federal. This is a city with a lot of wealth and it is all close to 90 percent local. People seem to believe that foreigners have fueled the boom of prices of properties here when the facts show the opposite. In my area of Palermo Viejo I know very few foreigners who own a business and who have rented or purchased a large commercial property to run a business in this neighbourhood.

Let me ask you a question if you had no faith in banks or the stock market where would you put your monies ?

And to answer your question Tangob banks can collapse in Argentina now and it will have a neglible effect as noone in their right minds keeps more than the bare minimum in accounts here.

 

[tangobob]

As you know Pericles I have just bought property here, and judging by what has happened, I think for once I have made the right move. (the banks go bust and I owe them money HA!)
I still look at it realistically however and belive that there could still be a reduction in property values, though I belive any reductions will be very short term.
I have seen this happen often at home. All the news reports and papers fortelling the end of the property boom and people in permanant Negative equity, but if you look long term at any property market the trend is always up. Even those people who were badly caught out in the eighties who stuck to their guns are now sitting pretty. (apologies for mixing my metaphores)

 

[soulskier]

TangoB, your stoked. Property in BA is a great asset, regardless of what some of the haters on this board will say.

 

[igor]

Haters? I hope you don't call a "hater" everybody who does not say that buying property in Argentina is the ultimate and 100% safe investment and it is time to buy, buy, buy now.

 

[Stanexpat]

Why are these threads so often turned into discussions on the merits of real estate there? Why when anybody offers an opposing view labeled anti-Argentina or a hater? If real estate is a good investment there they should be able to argue based on the merits.

 

[tangobob]

TangoB, your stoked. Property in BA is a great asset, regardless of what some of the haters on this board will say.

I think and hope you are right, however I still think Iceland will be the place to buy very soon, before they freeze the prices.

 

[nikad]

I believe the real estate market is currently an investors market, and they are all trying to sell their properties, and very few people are buying at these prices. A 20-30% adjustment is in order for several reasons:

The price per sq meter in BsAs is worth more than the sq meter in Miami ( in all honesty even if things are really bad in the US as of now, and possibly for a couple of years, their market is worth more and will recover in a few years: it is the time to buy there, not here! ) 5000usd in Puerto Madero vs 2000usd in Miami (!!!)

Also who is going to pay the current RE prices? the farmers? ( see how much the price for commodities has dropped ), the middle class with no credit? the high class that can easily buy in Europe or US now?

The world will face a global recession ( lets hope it doesn´t become a depression ) do you really think that Argentina will not be affected?

The RE purchasing decreased 17% last month ( official data ) The fact that people are bringing their money home, doesn´t mean that they are going to spend it here

 

[Ries]

I am not sure WHICH apartments in Miami are cheaper than those in BsAs- but they sure arent ones I would want to live in.
I have spent a lot of time in Miami- and yes, electronics are cheaper there- but its not a city I would choose over Buenos Aires for many quality of life issues.
In Miami, even in crappy suburbs of Miami, prices for a 3 bedroom condo of $1 million to $2 Million are very very common.
And these are new, shoddily built concrete buildings, with no character, craftsmanship, or soul.

Me, I go by a lot more than price per square meter- and you can still buy an apartment in BsAs that is 100 years old, with 4 meter ceilings, stained glass, hardwood floors, with a marble lobby and brass railings, for $200,000.
In fact, if you go out of the tourist crescent of San Telmo/Recoleta/Palermo, you can go cheaper and get more.

In Miami, you get a slot in a concrete ice cube tray. I just looked at Miami real estate for sale online, and I think your dollar goes a LOT farther in Buenos Aires. $200k in Miami buys you 1 bedroom tiny cubbyhole in any desirable neighborhood, or someplace like Kendall or Pembroke Pines.
You ever been to Pembroke Pines? Yeccch.

I think part of what is happening, which relates back to bringing money home, is the slow decline of the isolation of Argentina.
Globalisation means global pricing- especially in neighborhoods like Recoleta, which are globally desirable. It used to be the old "culo del mundo" way of thinking ruled, the backwater that no one ever knew about. But now, Italian filmmakers and New York Fashionistas buy places here, and inevitably, some things start to be priced globally. The internet works both ways, you know.
Obviously, real estate is always LOCAL, but global thinking on value affects even real estate, especially in desirable neighborhoods.
And once that genie gets out of the bottle, its never going back in.