Do you fear a crash similar to 2001?

[Carlos Danger]

You mentinioned K was corrupt, ok, How?

 

[perry]

I think the Spanner in the Works here is the "Building Administration Fees "

This I fully agree with you and could equal the mortgage crisis of the usa. Expenses here in Buenos Aires are skyhigh for the earnings of the people and roughly twice as dear than europe in us dollars. How can this go on when peoples earnings have been decimated by inflation. cutbacks. and devaluation. Recoleta is now one of the worst performing real estate markets due to its very high condo fees and lots of apartments for sale.

 

[steveinbsas]

Recoleta is now one of the worst performing real estate markets due to its very high condo fees and lots of apartments for sale.

Consorcio fees which more than doubled in two years was the resaon I sold my apartment in Recoleta...in 2009!

 

[wrangler]

1. People hold cash instead of depositing it in a bank, there is also way easier access to Dollars now. There will not be another 2001 scenario .
2. Last year there were Mortgages here / Housing loans to the amount of $170,000 , but due to inflation this has dried up.
3. As of last weeks meeting with IMF I don't think Macrinomics are in effect anymore .....

MEET YOUR NEW MASTER -

No, Macrinomics are not in effect. It's the IMF who is in charge of that, however, Macri will pay the consequences of that..

 

[Ceviche]

Consorcio fees which more than doubled in two years was the resaon I sold my apartment in Recoleta...in 2009!

In my building, it trippled in 2 years.

 

[earlyretirement]

I really enjoy VisualPolitik's videos. They always come across as objective and informative. This video doesn't even scratch the surface of the corruption under the Kirchner years under power. I always find it comical when people say they did a good job. I was there in Argentina ALL throughout their reign of terror and let me tell you.... they did NOT do a good job.

Say what you want about Macri and how horrible he is doing. But P-L-E-A-S-E don't try to tell me with a straight face how wonderful the Kirchner's were or ask me how they were corrupt??? And yes inflation was VERY high under them. Many years of 35%ish inflation each year. I recall one year where I was forced to give my employees a 37% a year raise which was the true cost of inflation. My salaries were more than doubling every 3 years in all the companies that I owned or invested in.

Like I said, Argentina is broken. When you have a large % of the people asking like another poster how the K's were corrupt? You know there is a serious problem with the country. Many in Argentina don't care if someone else is stealing money as long as they get their piece of the pie. Essentially you have a large percentage of Argentines that have institutionalized corruption and plundering of politicians. That in and of itself should be an eye opener. It's sad but that's kind of the norm there. I don't find over the large majority that many people are ethical and honest in Buenos Aires (outside of BA it gets much much easier). This type of "live for today" and take as much as you can is ingrained with how the locals think. So they pass on that trait to their kids. Part of the reason why Argentina is broken. They have a "kill or be killed" (or rather a steal or be stolen from attitude).

This obviously isn't everyone. Lots of good people too. But enough people are like that across all industries and normal every day life that it makes things more difficult and less efficient vs. first world or civilized countries.

This I fully agree with you and could equal the mortgage crisis of the usa. Expenses here in Buenos Aires are skyhigh for the earnings of the people and roughly twice as dear than europe in us dollars. How can this go on when peoples earnings have been decimated by inflation. cutbacks. and devaluation. Recoleta is now one of the worst performing real estate markets due to its very high condo fees and lots of apartments for sale.

I agree HOA fees are high in Buenos Aires, but you can't equate that with the mortgage crises in the USA. I assume you mean the last meltdown? You can't compare high HOA fees in Buenos Aires with an issue that almost spelled total destruction in the GLOBAL economic system. CDO's SIV, and other collateralized debt instruments that were repacked and sold to others can't even be compared in the same sentence. It's night and day. NOBODY globally cares about high HOA fees in Argentina. It doesn't affect them in the least.

Absolutely the issue is concerning for many locals. But you just can't compare the two issues. People in the USA are leveraged to the hilt. People in Argentina aren't. And just about all the properties are owned free and clear by property owners with no leverage or debt. Sure, mortgages started recently but they are nothing like in the USA or Europe.

Condo fees in large part keep going up because of the wicked inflation. I believe almost every single employee is part of some union and the doorman's union is one of the strongest in Argentina. Those big wage increases each year don't help with keeping HOA fees stable. And obviously with the utility bills rising they went up as well.

Many times how outrageously expensive HOA bills are or not is a big component to how well managed a building is. Also, there is a lot of corruption in some HOA's as well where I've caught outright stealing by HOA's padding bills or doing things that were non-existent. But yes even on well managed buildings, in peso terms they will keep going up with inflation. But I own several apartments and in dollar terms my HOA bills have been stable for many, many years but in this buildings they are really well managed with a lot of oversight. (And this is the first time right now that I think with the exchange rate they are actually cheaper than previous years).

But people will manage just as they always eventually do through each crises. This is nothing new over the history of Argentina with the constant inflation. It's painful but they will ride this storm out as well. Those that can't afford the high HOA fees will sell and move on. Or rent somewhere else (as many, many properties in the Capital are owned by owners that just pass on the HOA fees to a tenant). Many local friends there have sold their properties and bought PH's that have no HOA fees.

The ones that can't afford to live in the Capital will move further out in cheaper areas or just move out of Argentina completely like you are seeing both with locals and expats. The ones that stay behind will find a way to get by like they always do. As painful as it is.

 

[Phatbuddha]

This I fully agree with you and could equal the mortgage crisis of the usa. Expenses here in Buenos Aires are skyhigh for the earnings of the people and roughly twice as dear than europe in us dollars. How can this go on when peoples earnings have been decimated by inflation. cutbacks. and devaluation. Recoleta is now one of the worst performing real estate markets due to its very high condo fees and lots of apartments for sale.

AUDIT THE SUCKERS !!! THEN GIVE THEM THE BOOT !!

 

[Phatbuddha]

I really enjoy VisualPolitik's videos. They always come across as objective and informative. This video doesn't even scratch the surface of the corruption under the Kirchner years under power. I always find it comical when people say they did a good job. I was there in Argentina ALL throughout their reign of terror and let me tell you.... they did NOT do a good job.

Say what you want about Macri and how horrible he is doing. But P-L-E-A-S-E don't try to tell me with a straight face how wonderful the Kirchner's were or ask me how they were corrupt??? And yes inflation was VERY high under them. Many years of 35%ish inflation each year. I recall one year where I was forced to give my employees a 37% a year raise which was the true cost of inflation. My salaries were more than doubling every 3 years in all the companies that I owned or invested in.

Like I said, Argentina is broken. When you have a large % of the people asking like another poster how the K's were corrupt? You know there is a serious problem with the country. Many in Argentina don't care if someone else is stealing money as long as they get their piece of the pie. Essentially you have a large percentage of Argentines that have institutionalized corruption and plundering of politicians. That in and of itself should be an eye opener. It's sad but that's kind of the norm there. I don't find over the large majority that many people are ethical and honest in Buenos Aires (outside of BA it gets much much easier). This type of "live for today" and take as much as you can is ingrained with how the locals think. So they pass on that trait to their kids. Part of the reason why Argentina is broken.




I agree HOA fees are high in Buenos Aires, but you can't equate that with the mortgage crises in the USA. I assume you mean the last meltdown? You can't compare high HOA fees in Buenos Aires with an issue that almost spelled total destruction in the GLOBAL economic system. CDO's SIV, and other collateralized debt instruments that were repacked and sold to others can't even be compared in the same sentence. It's night and day. NOBODY globally cares about high HOA fees in Argentina. It doesn't affect them in the least.

Absolutely the issue is concerning for many locals. But you just can't compare the two issues. People in the USA are leveraged to the hilt. People in Argentina aren't. And just about all the properties are owned free and clear by property owners with no leverage or debt. Sure, mortgages started recently but they are nothing like in the USA or Europe.

Condo fees in large part keep going up because of the wicked inflation. I believe almost every single employee is part of some union and the doorman's union is one of the strongest in Argentina. Those big wage increases each year don't help with keeping HOA fees stable. And obviously with the utility bills rising they went up as well.

Many times how outrageously expensive HOA bills are or not is a big component to how well managed a building is. Also, there is a lot of corruption in some HOA's as well where I've caught outright stealing by HOA's padding bills or doing things that were non-existent. But yes even on well managed buildings, in peso terms they will keep going up with inflation. But I own several apartments and in dollar terms my HOA bills have been stable for many, many years but in this buildings they are really well managed with a lot of oversight. (And this is the first time right now that I think with the exchange rate they are actually cheaper than previous years).

But people will manage just as they always eventually do through each crises. This is nothing new over the history of Argentina with the constant inflation. It's painful but they will ride this storm out as well. Those that can't afford the high HOA fees will sell and move on. Or rent somewhere else (as many, many properties in the Capital are owned by owners that just pass on the HOA fees to a tenant). Many local friends there have sold their properties and bought PH's that have no HOA fees.

The ones that can't afford to live in the Capital will move further out in cheaper areas or just move out of Argentina completely like you are seeing both with locals and expats. The ones that stay behind will find a way to get by like they always do. As painful as it is.

So I would imagine this is going to be quite a problem for the retired sector of home owners and like you mentioned, Recoleta may have a high amount of owners in this bracket

 

[earlyretirement]

So I would imagine this is going to be quite a problem for the retired sector of home owners

Oh yes, I didn't want to diminish the problem. Definitely people are feeling the pain. With this kind of rise and most locals earning in pesos vs. dollars definitely it's felt. My point was that it's not a problem that can be compared with the mortgage meltdown in the USA. Realistically NO ONE around the world cares about countries like Argentina or Venezuela. They read about the 1000% inflation in Venezuela and the attitude is more or less (man it must suck to live there and hopefully they can leave). But after that no one really cares. I'm not saying that's good or bad. But thats reality.

What's happening in Venezuela is shocking, deplorable and horrific. But the truth is no one around the world really cares. Same thing about Argentina. They might read about the record $57 BILLION emergency IMF loan and the most sympathy you will probably get is, "Oh i went there for vacation and really enjoyed it and had a great steak". But then after that they probably will be a little giddy wondering if that steak dinner is going to be cheap again. Again, sad but true.

NO one around the world cares what happens in countries like Venezuela or Argentina for the most part except locals. What is going on in Argentina isn't new. It might be to some expats that came here during the glory years and did relatively well and now are leaving. But to old timers that I talk to this isn't anything new or even shocking. My senior citizen friends of course are pissed but they acknowledge this will keep happening every few decades and probably will keep happening. Fortunately they own their properties outright (unlike my American senior citizen friends) that are all in debt. So ironically my poorer Argentine senior citizen friends living in 40% a year inflation are more shielded vs. some of my American senior citizen friends that are all leveraged to the hilt and some have lost their homes).

Life goes on. The people that can't afford the high HOA fees will move on. Maybe some buildings would consider getting rid of their Portero/doorman. And maybe their security but for those of you that own property, you will know how screwed up a situation it is when you have to fire a doorman. Even if you catch them stealing you have to pay them an obscene amount of money when you fire them even if it's for cause like you catch them on camera stealing. I guess that's another topic for another post....

 

[Phatbuddha]

I think Argentina really needs to wake up to the Extortion racket of the "Property Administration Companies "
If it wasn't for the ZERO Inheritance TAX policy this country would have folded Decades ago ......