How has the high end luxury property market been affected by Black Monday?

Musicman

Newcomer
What % discount can one get over existing asking prices? Could there be another great long term buy opportunity similar to 2001 crash? I made so much money buying properties after the 2001 crash!

However, I am currently living in my villa in Saint Tropez these days and I don't have my finger on the BsAs pulse like before. That said my investing instincts are telling me there could be a great opportunity this year after the elections and was thinking about moving back for a while.

Thanks in advance for your thoughts,

MM
 
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perry

Veteran
What % discount can one get over existing asking prices? Could there be another great long term buy opportunity similar to 2001 crash? I made so much money buying properties after the 2001 crash!

However, I am currently living in my villa in Saint Tropez these days and I don't have my finger on the BsAs pulse like before. That said my investing instincts are telling me there could be a great opportunity this year after the elections and was thinking about moving back for a while.

Thanks in advance for your thoughts,

MM

Please advise us all where you have brought in Buienos Aires in the past and approximate values . Im sure this will be interesting for our members .
 

steveinbsas

Registered
Could there be another great long term buy opportunity similar to 2001 crash? I made so much money buying properties after the 2001 crash!
In spite of what others have recently posted, in one respects, the "crash of 2001" has already been repeated, at least in terms of the massive devaluation of the peso. Fortunately, this time it didn't happen overnight.

PS: As Perry has recently noted, the new capital gains tax (which apparently will not be adjusted for inflation) will probably wipe out any long term gains and quite possibly result in a long term capital loss.
 
Yep. MANY things are different vs. 2001 when you could pick up properties VERY cheap. I've said it before and I'll say it again, that was a once in a lifetime chance to get real estate so cheap in Buenos Aires in great areas. I remember right after the crash looking at some big 3 bedroom properties in Recoleta for less than $150k! There were some desperation then. Even in 2002 and 2003 and 2004 and 2005 there were great deals.

But as others mentioned, now with the Capital gains tax it doesn't really make sense. Another thing different back in 2001 and after was there was almost NO tourism so those that bought for the new found tourism industry had VERY high occupancy rates. Now, the market is totally flooded in Buenos Aires in ALL neighborhoods with all kinds of rentals so you're ROI is much lower as well as occupancy rates.

Still, if some miracle property prices went as low as 2001, I'd definitely load up again. Paying 20% capital gains tax is still worth it if you are getting a bargain basement price. There is capital gains tax in most first world countries so this isn't anything new for experienced investors. Most countries where I've bought and sold real estate have a capital gains tax.

The reason why people are so shocked by it is because it was always 0% before in Buenos Aires.
 

steveinbsas

Registered
Paying 20% capital gains tax is still worth it if you are getting a bargain basement price. There is capital gains tax in most first world countries so this isn't anything new for experienced investors. Most countries where I've bought and sold real estate have a capital gains tax.
But how many of those countries ever had a 40% (if not higher) inflation rate of their national currency while real estate was sold in another currency which held its value ?

As Perry has pointed out, due to inflation, the value of a property in pesos could increase dramatically in just a couple years, but not in dollars.

As a result, when selling a property for the same price as buying it (in dollars), there will be a capital gains tax on the selling price without any capital gain!!!!

...Also now with the new capital gains tax of 15% it makes little sense to buy a property as the risk factor is high . For example if I brought a property in January 2018 for 100 thousand dollars or at that time 1 ,700.000 pesos and now resell it for the same amount US$ 100,000 this is currently 5,700,000 pesos Banco de la Nacio venta .

This means that a 15% tax must be paid on the false earning ( ganancia ) of 4 million pesos or 600 thousand pesos US$ 11,000 approximate . This is a most unfair law as it does not contemplate the sale and purchase of property in us dollars and takes the peso as its base . This means that the seller is paying for the devaluation of the peso even though he did his transaction in us dollars.
In my opinion, anyone who buys property in Argentina now should do so with no intention of selling it in the future.

PS: As I wrote said about ten years ago, "Buy property to satisfy your need, not your greed."

PS2: And as I also wrote about ten years ago (quoting Glenn Beck). "Buy land where you can grow your own food."
 
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garryl

Registered
Yep. MANY things are different vs. 2001 when you could pick up properties VERY cheap. I've said it before and I'll say it again, that was a once in a lifetime chance to get real estate so cheap in Buenos Aires in great areas. I remember right after the crash looking at some big 3 bedroom properties in Recoleta for less than $150k! There were some desperation then. Even in 2002 and 2003 and 2004 and 2005 there were great deals.

But as others mentioned, now with the Capital gains tax it doesn't really make sense. Another thing different back in 2001 and after was there was almost NO tourism so those that bought for the new found tourism industry had VERY high occupancy rates. Now, the market is totally flooded in Buenos Aires in ALL neighborhoods with all kinds of rentals so you're ROI is much lower as well as occupancy rates.

Still, if some miracle property prices went as low as 2001, I'd definitely load up again. Paying 20% capital gains tax is still worth it if you are getting a bargain basement price. There is capital gains tax in most first world countries so this isn't anything new for experienced investors. Most countries where I've bought and sold real estate have a capital gains tax.

The reason why people are so shocked by it is because it was always 0% before in Buenos Aires.
Totally agree. That was a life time opportunity. The situation is way different now. Plus I must add, the Argentines have more cash this time in their pockets even though it's hard now. Last time banks failed and screwed many. The chance now to get bargain is much smaller, unless things get worse and worse, which is not likely.
 
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