Paraguay V Argentina, Lifestyle And Taxes

[steveinbsas]

Steve's house and land is super cool. .

Thanks, that's very kind of you to say.

[background=rgb(252, 252, 252)]However, if you think that BB is depressing, you should know Punta Alta... [/background]

I would become very depressed living in either city, especially Punta Alta. There aren't any "nice" neighborhoods there (though there are several in Bahia Blanca).

What "you" should know about Punta Alta is that the people are very friendly and there are very good people there. I was fortunate that the family that built the house I now live in helped me an many ways after my arrival, including getting title to my car and my first Argentine driver's license.

There are hundreds of businesses in Punta Alta and no vacant retail spaces in the center. There aren't any great restaurants,but that doesn't make any difference to me. The health care is great. One of my doctors is also a facebook friend. he also plays guitar in a rock band and another member of the band is also a computer genius and the only person I know here who speaks English.

In Capital Federal I lived in Recoleta, not far from Villa 31. I think it would be more "depressing" to live there than either Bahia Blanca or Punta Alta, but, since it's not officially a city, it looks like Punta and Bahia Blanca win, though I'm sure there are less desirable towns than Punta Alta. I just haven't been to any of them.

As far as I'm concerned, if you enjoy the country lifestyle and can still get what you need from the city, it doesn't matter how you would feel if you had to live in the closest ones...as long as you don't.

 

[Tres Picos]

I looked at all four properties, keeping your list of attributes in mind

The houses in Pilar and Del Viso are far from being semi-rural and well within the zone of chaos in the event of an economic crisis.

The house in Del Viso is the only one of the five that is less than 150 mtr2 and if you "drive" around Del Viso in Google you will see it is not a particularly attractive area. I don't see how you could consider it secure.

The house in Sierra de los Padres (a barrio cerrado) is also larger than you specify and you would have to drive some distance to buy groceries and supplies as well as seek medical and dental services.

Also something to consider in all for locations: how would the kids get to and from school, especially when you are out of the country for months at a time?

Do you know if the house in Mendoza is in a barrio cerrado? It looks like a spec house to me and the lot is just a strip of ground.

If you want to live in a semi-rural barrio cerrado close to a major city I suggest you look at Pago Chico near Bahia Blanca. I recently looked at prices for two and three bedroom houses there and found a couple in the $180,000-$200,000 price range. I wouldn't want to live there. I wanted to get an idea of current prices in case I decide to sell the house in which I am now living.

Pago Chico is less than 20 minutes form the Bahia Blanca airport and flight to BA take 75 minutes. My house is about 20 minutes from the airport. Pago Chico has 24 hour security. Land prices are $30-$40 per mtr2 but most of the lots for sale look like the lot of the house in Mendoza.

Houses (decent enough to live in) in Punta Alta and Bahia Blanca start at $180,000 but only have two or three bedrooms and no front or side yards. A nice three bedroom house with a yard in the better neighborhoods of Bahia Blanca are well over $300,000. Quintas similar to mine are more expensive the closer you get to Bahia Blanca. I recently found one I like more than mine, but it's $600,000 USD.

My house is close enough for kids to walk to school (2 KM) and there are more than a half dozen despensas selling groceries and supplies in the same area. There's also a great auto mechanic and 3 carnecerias (one of them is in a grocery store). Most importantly, there is a public clinic with a doctor, dentist, and nurses at one corner of the plaza and the comiseria (police station) is on the opposite corner of the plaza.

The school here is great and the people are very proud of it. The three children of the previous owners of my house all attended it through high school. The youngest received his university degree in engineering last year and already has a great job in his field, so he apparently got an education here: he wasn't just socialized.

Thanks for looking at these.

150 sqm is all I need for 4 bedrooms if the house is smartly built. These are the ones that I got when filtering by 4 bedrooms. I think houses are a lot less compact, more common space, etc. in Argentina than what I'm used to due to the availability of space. 200 sqm or so would be fine.

Del Viso neighborhood looks nice to me on google maps but I've lived in some terrible cities so maybe my standards are too low. If you say it's insecure, I trust your judgement.

Re Sierra de los Padres, distance seems alright since I'd have a car. But yes, maybe slightly inconvenient when I'd be gone.

Walking/biking distance to school would be great!

Mendoza prop says "Semi Privado." Not sure what that is. What do you mean by "spec" house and "strip of land?"

I looked at Pago Chico on Google and the neighborhood seems nice enough. Sort of lacking in privacy though. The lots are a bit small, no? Why are properties in Bahia Blanca so expensive? Seems out of line with the size and location of the city.

 

[Tres Picos]

Why would anyone want to live in the most depressing city of argentina - Bahia Blanca.

What did you not like about it?

 

[MorganF]

I'm actually curious about why you found Bahia Blanca depressing. I once spent a few days there and had a lovely time. Of course, it's easy for a tourist to love a place...

 

[Tres Picos]

During the Kirchner years, the blue peso rate followed more or less the inflation. Last year, the exchange rate did not change much, but inflation did not stop.

As long as the exchange rate devalues in line with inflation, the situation can continue. If the current exchange rate holds, eventually it will crash.

Interesting side topic.

Do you have some references on the inflation rate for 2016? I haven't been able to find them and am curious. Increases in certain consumer prices cased by cancellation of subsidies don't count.

As I posted in reply to Morgan, the ARS devalued about 23% in 2016 so I do not understand why people are saying it didn't budge.

Yes, it might not have devalued as much as the inflation rate but there is not a simple correlation.

1) Other factors. I suggested that political change might have made Argentina more attractive to investments leading to increased demand fro ARS. That's just a guess. There are several other factors.

2) Timing. The two are not necessarily synchronized. I suggested that it seems exchange rate might precede the inflation if govt policies can be predicted.

Do you agree with Morgan, that Macri's regime is manipulating the exchange rate to keep the ARS strong?

 

[MorganF]

Tres Picos,

"As I posted in reply to Morgan, the ARS devalued about 23% in 2016 so I do not understand why people are saying it didn't budge."

ARS to USD: 23% fall during 2016.
Peso-denominated Inflation in the real-life cost of living for people living in Argentina for something, based on things you actually spend money on: rent, electricity, water, food, public transportation, etc: something like 50% (debated what the actual number is, but definitely within the 35% - 65% range.) (Note: it's important to calculate the numbers based on what we spend money on; if you exclude something like "well, the manipulates controls the price of X, and it changed how it manipulates it to get a different price, so we won't count that number", like the change of subsidies for electricity -- then you will clearly get a fictional number, since you're excluding expenses that have zoomed up in price, that people we are paying.

So, that is discrepancy of about 30% -- inflation was something like 30% more than the corresponding devaluation during the course of 2016.

Not to mention, the 13-to-16 fall happened in January, and it was more closely around the 15/16 rate for most of the year after January.

And also, not to mention, that just brought the official peso into line with the blue rate, which most of us were using anyway, so we mostly didn't notice the effects of the devaluation: the blue rate remained mostly unchanged.

 

[toongeorges]

Do you have some references on the inflation rate for 2016?

During Cristina's years, inflation was about 25-35% annually, though government did not want to admit it, so they replaced the people at the national statistics office with political friends who published figures that said annual inflation was lower than 10%. Everyone knew inflation was 25-30%. In the political denial of the economic problems, the official exchange rate was fixed, but in practice this exchange rate was only in 1 direction: USD could be converted to pesos at an artificial low USD rate, but you could not exchange pesos to USD. To exchange pesos to USD, you had to trade on the black market against the blue rate, which was continuously devaluing in line with inflation.

Macri ended the fixed exchange rate. I exchanged 1 USD for about 16 pesos in December 2015. The exchange rate fluctuated a bit since then, but it is about the same now. The yearly inflation in pesos in 2016 was around 40%. That is why you hear people complain now more than before that Argentina is too expensive. Before, the exchange rate followed the inflation. This relationship seems to have been temporarily suspended, which makes the current situation in Argentina more explosive than usual. It looks like Argentina is repeating its own history and heading for another crash.

If you do not understand the economic policies during Cristina's time as explained above, no one does. The economy and how it is handled in Argentina does not make sense. It is trapped in cycles of busts and recovery that follow each other. Argentina seems to be heading for another bust.

 

[Bajo_cero2]

Tres Picos, on 21 March 2017 - 04:22 PM, said:

I'm talking about 2% in real returns, i.e. after inflation.

Please explain the cause and effect relationship, if any, between the US dollar and price increases of 30%-40% per year on goods made and sold in Argentina...in Argentine pesos.

Simple. The usd is artificially cheap. So, the President rise the price of electricity, gas, water, tall and many other goods he and people close to him owns. So, they receive a lot more pesos that exchange to artificially cheap usd and they send them abroad (Panama papers). However, the USD they are buying so cheap are expensive and the other 40.000.000 people is going to be paying the real pesada herencia for 3 generations because they come from international loans. This fraud was done before during the last dictatorship.

 

[Bajo_cero2]

As I posted in reply to Morgan, the ARS devalued about 23% in 2016 so I do not understand why people are saying it didn't budge.

It looks like more like 50/60% with the USD at the same price so, we had 50/60% inflation in USD.

 

[earlyretirement]

I don't actually think the OP is a troll. There are a LOT of people that are ignorant to what the realistic costs are in Argentina. I lived there for 8 years before finally moving back to the USA in 2011. It was once I had a few kids did I realize that I didn't want to raise them in Buenos Aires. Don't get me wrong. I really love Argentina. Beautiful country. But I could see back then that inflation was going to continue.

I had a few companies and it was shocking to see salaries doubling every 3 years. I did everything in white so it was especially painful.

I still own some properties in Buenos Aires and it's shocking the cost of condo fees and expenses. I have some apartments where the HOA fees are more than my big house in California in one of the most exclusive and upscale communities in California.

I don't think it's realistic to say you don't care about your kids education. The public schools in Argentina are horrible. You can't compare it to education in other places where there is a good public education system. That part of your post did come off as a bit trollish. But I have met some people with that mindset. And you know what? Their kids have pretty much ended up losers with no real job prospects in the foreseeable future.

Also, your post about not caring about health insurance doesn't make sense to me. The public health system in Argentina isn't good and I doubt you'd want to take your chances without having coverage. Especially with children. And good quality health insurance isn't cheap now. Good plans are not cheap.

Cost of food I've found is even more expensive than the USA now in Argentina. Cost of clothes (very inferior quality compared to the USA or Europe) are expensive. Electronics are expensive.

Also, although insurance to insure a house isn't expensive, I'd still recommend it. After all, taking a loss on a $200,000 property when you're net worth is only $2M and will drastically shrink doesn't sound like a good risk/reward scenario.

I don't find your estimates of how cheap Argentina is to be realistic. Good luck.