Cost of living vs. salaries in Cap Fed

JeffR

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I ran across this article in La Nacion the other day and was wondering if anyone remembers what happened in August of last year that caused this ratio to change so suddenly?

Read the article a couple of times but didn't see an explanation for the 'why', only the 'what'. Trying to figure out the cause and effect, if that makes sense.

La Nacion article link: https://www.lanacion.com.ar/opinion/el-costo-vivienda-relacion-salarios-nid2310118

Ratio precio de vivienda v salario en cap fed.png
 

JeffR

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EDIT: Maybe a better post headine is: "Cost of buying an apartment vs. salaries in Cap Fed" but don't see a way to change it at this point.
 
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pennsylvania

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Real estate prices here are in USD, so as the exchange rate skyrocketed, so did the price relative to people's ARS salaries.
 

FallenAngel

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Do not worry that graph will quickly adjust to long-term trends. The price of housing is falling fast!
 

on the brink

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Do not worry that graph will quickly adjust to long-term trends. The price of housing is falling fast!

I wouldn't be so sure. Argentines have a long tradition of sitting on their properties for ages, rather than adjusting prices down.
 

JeffR

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Doctor, thank you.

I did look at the value of the peso, but what I am trying to understand is this:

If the peso exchange rate increased by about 50%, why would real estate prices increase by 200% over the same time period. I can understand a 1:1 correlation, more or less, but to see such a huge swing is very odd, at least to me. Even when you factor in a decrease in buying power due to salaries being lower (measured in USD) it is still a pretty dramatic variation.
 

JeffR

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Real estate prices here are in USD, so as the exchange rate skyrocketed, so did the price relative to people's ARS salaries.

Thanks Pennsylvania,

I replied to Doctor Rubliar before I read your message, but even factoring that in it still seems like a big price swing. I know the real estate business pretty well, although not so much in BA, but I wonder if there is also a shortage of that particular size of housing to buy (vs. rent). If there is then perhaps supply and demand combined with the peso weakening and purchasing power going down would account for the big change?
 

Bajo_cero2

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Thanks Pennsylvania,

I replied to Doctor Rubliar before I read your message, but even factoring that in it still seems like a big price swing. I know the real estate business pretty well, although not so much in BA, but I wonder if there is also a shortage of that particular size of housing to buy (vs. rent). If there is then perhaps supply and demand combined with the peso weakening and purchasing power going down would account for the big change?
They taxed the profit in real estate with 15%. I guess it is a tricky 15%.
 
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