Foreign investments drying up?

CarverFan

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Some friends of mine are trying to rent out their property here and were hoping for foreign tenants. It's a very large office building. The agent told them they were having trouble marketing it as foreign companies were reducing investments here considerably. Anyone got any advice re this? TIA!
 
CarverFan said:
Some friends of mine are trying to rent out their property here and were hoping for foreign tenants. It's a very large office building. The agent told them they were having trouble marketing it as foreign companies were reducing investments here considerably. Anyone got any advice re this? TIA!

Tell your friends to sell their office building and buy one in Chile (or Brazil). Investing in Argentina right now is a huge risk and as I had mentioned on previous posts, I know of a number of global companies that are planning on leaving Argentina completely before the end of 2012 and taking close to 3000 jobs with them.
 
why is such a huge risk investing in Argentina now? Sorry for the silly question but reading the news about Argentina from abroad it doesn't seem to be that bad, except from the inflation of course.
Is it wise to invest in buying a property there JWB?
 
One thing about property down here is that it always retains it's value because there's no such thing as a mortgage. Everything is cash, so property is never a terrible investment.

In terms of foreign investors, if you do a search on the internet for those foreign companies doing business in Argentina you'll notice a vast majority are pulling out due to the instability of the gov't as well as the peso. Kristina just recently put a halt on all foreign imports, as a result, you have a bunch of BMWs, Tractor equipment, Blackberries, and whatever else they import sitting on the tarmac at EZE. They simply don't want foreign investment and would like everything built in house.

That's not to say you can't make it, there are a few folks on these forums that own businesses and say they do quite well. I personally wouldn't invest a dime here unless the return was significant...
 
mariano-BCN said:
why is such a huge risk investing in Argentina now? Sorry for the silly question but reading the news about Argentina from abroad it doesn't seem to be that bad, except from the inflation of course.
Is it wise to invest in buying a property there JWB?

Good answer below about investing. As for property, I would wait until the next crash sometime next year.

Properties right now are VASTLY overpriced (in my opinion). When you can purchase a 3 or 4 bedroom house in cities like San Antonio or Salt Lake in the states for 150-200K you can barely get a 1 bedroom apt here.

Once the economy crashes here (and it will) prices will get back to what they are actually worth and you'll be able to get a place for a reasonable and fair price. I'd wait a year or so.
 
thanks for the info, I didn't know economy is that bad in Argentina. Prices are incredible high, I was in May there and non in November until April and I'm wondering if prices are still that ridiculous. Many things -electronica, clothes, even food- are in Amsterdam even cheaper! Only transportation in Argentina is cheaper.
This gives me a deja-vous: in the nineties was Argentina also very expensive though to the 1x1 rule, it was not easy to convince fellow Argentineans that was something absurd: a poor country with extreme high prices for foreigners.
Hope you're right JWB, about a coming crisis -then it will the time to buy a property par example- but I don't see any signals of a coming crisis: China and India are still demanding Argentinean soy and meat and don't see why there'll be a crisis in Argentina. But maybe I don't know enough. Pls tell JWB, thanks.
 
prices will have risen since you were last here.

Argentina's economy is doing well but all the eggs are in one basket - soy. If the commodity market dries up, there is no cushion here. When/if it will is subject to considerable debate but it's my opinion that any country that doesn't have a diverse economy is due for a reckoning at some point.

As to why companies are pulling out - there are a million valid reasons. Incredibly high corporate taxes, incredibly difficult employment laws, government intervention (esp in foreign companies), untrustworthy, expensive and cumbersome banking systems and regulations, high cost of doing business here, constantly changing laws, etc.

The big boys are taking their toys and going to Brasil, Chile or Uruguay. The smaller foreign companies are here but quite a few I know are sunsetting their business or simply not investing more.
 
JWB said:
Good answer below about investing. As for property, I would wait until the next crash sometime next year.

Properties right now are VASTLY overpriced (in my opinion). When you can purchase a 3 or 4 bedroom house in cities like San Antonio or Salt Lake in the states for 150-200K you can barely get a 1 bedroom apt here.

Once the economy crashes here (and it will) prices will get back to what they are actually worth and you'll be able to get a place for a reasonable and fair price. I'd wait a year or so.

I doubt we see a crash next year, or the next. The economy really isn't doing that bad due to the fact Argentina has an abundance of soy. Without it, they're in trouble. It's tough to fathom that a crash isn't imminent from the outside and every day life, but they'll keep plugging away til the soy well runs dry...

I've been calling a crash for the past three years, but it's just not going to happen. JWB if you have further evidence for your prediction of a crash, do share.
 
I agree, I don't think a crash is coming, but perhaps a slowdown. Soy plants will not cease to grow, but is the market price what sustains Argentina. During the crisis in 2009 soy dropped by ~30% and the Argentine growth stalled. Soy recovered, but is now flat. Watch out for how the international situation evolves...
And regarding the original theme of the thread: investment may be slowing down as companies realize what many in this forum are already talking about...Argentina has gotten expensive!
 
I've heard that a crash isn't imminent but that the peso will get devalued a bit (maybe 25%) against the dollar after the elections. My argentine family are also expecting inflation to get a LOT worse after the elections. The government are making it very difficult for foreign corporations to invest in Argentina and with Brazil taking off, I'm not surprised that your friends are having trouble renting out their offices. I can't imagine that will change any time soon.
I think you'd have to be mad to invest in Argentina at the moment. Even property doesn't seem like a good idea. Given that people could buy 3/4 bedroom places (to do up) a few years ago for 50-80 grand, how can it possibly be a good idea to purchase the same sort of place now for 140+??
 
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