Pessification of real estate?

[BienTeVeo]

You forgot the fact that a mortage in pesos was (much) cheaper then a dollar one, so the ones who speculated with dollars were the ones losing out

In the immortal words of Travis Bickle: You talking to me?;-)

Yes, if someone had taken out a mortgage in pesos prior to the 2001 mudslide, it would've been status quo for them after the crisis. But I don't know anyone who did that. Pre-crisis, a peso was a dollar and a dollar was a peso and real-estate transactions were, as far as I know, all done in dollars. But that's just my perspective. I have no data. Cheers.

 

[el_expatriado]

So the government decreed that anyone with a mortgage of up to U$S100K on a primary residence could henceforth pay that mortgage in pesos. In other words, if you owed U$S50,000 prior to the crisis, you owed A$R50,000 after the crisis. For mortgage-holding argentines earning in pesos, it meant that they could keep their houses (assuming the numbers fell within those parameters). The creditors were of course were on the losing end of this equation.

With a couple of variations, it seems to be happening again. It won't be as bad as 2001, but things are going to be dicey for a while.

Debtors always win in Argentina. I have a mortgage in dollars on my apartment. I called up my escribanía today and I asked if they had heard the rumors of the property market and debts being pesified. They told me yes and they are following very closely.

I told them I was happy for them to make me an offer for an early cancellation on my mortgage. I have about 6 private investors who loaned me the cash. They told me there is one investor who wants out for sure. So, I am waiting to see what offer they will make me.

These kinds of panicky situations are what makes people nervous and sacrifice the profitability of their investments. I still have 8 months or so left on my mortgage, so I'm going to see if I can get a deal out of this. If I was an investor I might not want to wait 8 more months to see what happens.

 

[BienTeVeo]

You're in the catbird seat el_expatriado.

One addition to my little story. When we arranged our loan through the escribano, he told us that there were three investors involved. But we never met them. We dealt only with him, his son, and his very sweet, very elderly receptionist. So, comes the big day. We show up with a knapsack full of greenbacks (we split the difference and then converted to dollars) and enter the the conference room. Two of the investors are already there. Como estas, mucho gusto, todo bien, etc. Everyone sits down. Then the third investor walks in: it's the very sweet, very elderly receptionist!

You never know.

 

[sesamosinsal]

It's official: "Payments will have to be in pesos."

http://www.infobae.com/notas/657539...-compra-venta-de-inmuebles-sera-en-pesos.html

 

[Gringoboy]

Excuse me if I sound a bit dumb here, but my head is spinning with the machinations of this current administration.
We have a house for sale in a barrio cerrado, which due to the recent restrictions, the viewings have dropped considerably, or should I say, to virtually nothing. (thanks CFK! Thanks very much!)
Am I right in understanding that we will be able to receive USD until 31st October in the lucky event that we sell the house before then? But only pesos after that date?

 

[TERKILD]

Does not have any effect if you ask me!
Any buyer and seller can negotiate exactly what they want!
What a contract saids is one thing, other thing is the deal it self!

 

[Gringoboy]

From the mouth of del Pont:

'In addition, Marcó del Pont also made it clear that housing is to now be purchased with prices in pesos and said "it's a step forward for the 'pesification' of the real estate market."

My question therefore is: if we draw up a contract AFTER 31st October in USD, would that contract be illegal?

 

[allcraz]

Our apartment is for sale as well. It's been on the market just over 2 months and surprisingly, we have had lots of visitors. No deal yet, but we're still pleased with the turnout. My husband (Argentine) said the same as "TERKILD." If the contract has to say pesos, fine, but the seller and buyer can negotiate the actual payment however they want. Say we insist on dollars...we just put the equivalent in pesos on the contract. I still think viewings are going to drop off because it looks as though people will be discouraged and will want to wait and see what happens.

 

[PhilinBSAS]

Interesting comments but I'd like to ask the writers if they are property owners.

Yes

Also did they live in Argentina during the last crisis? Those who had money in banks lost a lot of money as their accounts were frozen after being changed to devalued pesos.

'

Yes

I am more interested in hearing from expat PROPERTY OWNERS about what they think and what plans they have and what ideas they have to sell and get the money out of Argentina before it is too late.

OK che boludo Sergio apart from other stuff I've got qualifications in economics and am a professional as being what is called in Argentina an urbanista* so read what I say if you want

Obligatory cautionary point - Whilst this is an insight into my thought process as requested, you make your own decision but not on my free non-specific general advice and be aware I don't have professional liability insurance here, you don't know me anyway and tough titties if you think you can sue!

1. It is a universal truth widely recognised that good property in the right location will keep it's value come what may. There is a corollary it may take longer to be able to "realise" by finding a willing buyer at times of greater uncertainty

2. I know there are locations in the city where underlying "real" values are substantial and increasing and where present prices reflect an undervaluation but price signals are haywire at the moment and therefore unreliable

3. I'd never have invested in property and thought that it was short term speculation, for those who are undercapitalised or for those of a nervous disposition but have sympathy for those who are finding this out the hard way. Particularly people who live here and are stuck here = Argentinians!

4. Never seen a better time to hold back wait and see!

5. Currently I'm out of the country and I was thinking of bringing more money into the country and investing but i think that I will hold off that for a while!

6. I did reasonably well last time around but kicking myself on not following up I identified and I could have done spectacularly well nevertheless I'm content

7. sooner the $US is out of the equation the better - it produces to many complications

Live long, try not to worry, exercise responsible judgement!

Want any more advice on the subject? then you pay! - that's what being a professional is all about

*not what one dictionary says is (typically) a woman who is interested in fashion, especially high end and non-mainstream fash... jajajajajja!!

 

[Gringoboy]

Our apartment is for sale as well. It's been on the market just over 2 months and surprisingly, we have had lots of visitors. No deal yet, but we're still pleased with the turnout. My husband (Argentine) said the same as "TERKILD." If the contract has to say pesos, fine, but the seller and buyer can negotiate the actual payment however they want. Say we insist on dollars...we just put the equivalent in pesos on the contract. I still think viewings are going to drop off because it looks as though people will be discouraged and will want to wait and see what happens.

Thanks for pointing that out to me.
Obviously, there are more than nine ways to skin a cat.