steveinbsas
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- Jul 27, 2006
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It was time for some basic logic...and simple economics."Live long and prosper." (While you can.)
PS: Stan notes: ... fewer and fewer people have the resources to buy property...Those in Argentina whose wages have not kept up with inflation can do what everyone else in the world in the same situation does: rent. This will provide revenue for those who do own the apartments, even in a declining market. Most owners will accept lower rent in the short term than a lower sales price, unless it is absolutely necessary. Some don't rent all all, however, as evidenced by the always shuttered windows (24/7/365) throughout Recoleta and Palermo. If the owners of these apartments are foreigners, they WILL pay when and if they sell. There is an assumption of rent if the foreigner doesn't live here (passports are checked) and the tax rate is 30%. These tax revenues will be confiscated before the sales process can be completed. Foreigners are required to obtain permission from AFIP when they sell, and if all the ducks aren't in order, the government will take even more (if the funds to buy the property were not "correctly" transfered). Argentine residents are apparently exempt from this scrutiny.
If there are no better places for Argentines to preserve their wealth than real estate, those who already own property simply will not sell while the market is flat or even in what would most likely be an isolated and short term decline. And, even as the dollar declines against the peso, prices of apartments (in dollars) will certianly adjust upward to reflect this factor as well.
PS: Stan notes: ... fewer and fewer people have the resources to buy property...Those in Argentina whose wages have not kept up with inflation can do what everyone else in the world in the same situation does: rent. This will provide revenue for those who do own the apartments, even in a declining market. Most owners will accept lower rent in the short term than a lower sales price, unless it is absolutely necessary. Some don't rent all all, however, as evidenced by the always shuttered windows (24/7/365) throughout Recoleta and Palermo. If the owners of these apartments are foreigners, they WILL pay when and if they sell. There is an assumption of rent if the foreigner doesn't live here (passports are checked) and the tax rate is 30%. These tax revenues will be confiscated before the sales process can be completed. Foreigners are required to obtain permission from AFIP when they sell, and if all the ducks aren't in order, the government will take even more (if the funds to buy the property were not "correctly" transfered). Argentine residents are apparently exempt from this scrutiny.
If there are no better places for Argentines to preserve their wealth than real estate, those who already own property simply will not sell while the market is flat or even in what would most likely be an isolated and short term decline. And, even as the dollar declines against the peso, prices of apartments (in dollars) will certianly adjust upward to reflect this factor as well.