Real estate crisis: article in English

[sergio]

http://www.worldpropertychannel.com...tine-peso-land-for-sale-in-argentina-5981.php

 

[ElQueso]

Yeah, the parents of one of my sister-in-law's schoolmates own a real estate business. They were telling us how bad the market has become. According to them, things have gotten so difficult that there is almost no one buying and selling. Almost no one wants to accept pesos for their property - it defeats the entire purpose of their investment. They are thinking they may have to close down shop if things don't get better soon.

Of course, they will join the other 100 real estate companies and 75,000 construction workers unemployed (according to the article) by this wonderful policy of the government. Two of my brothers-in-law were already affected by the slow down in construction a couple of months ago. They are now working for about 2/3 of the wages they were making with construction jobs, having switched to working in verdulerias. I'm not sure how many of the 75,000 workers are Argentinos - relatively few Argentinos work construction to begin with, unless we are talking trades such as plumbing, electricians, etc. But it affects legal residents quite a bit. Many of the constructions companies put their employees in the white to avoid constant hassle from immigrations. Construction paid relatively good.

Party on Cristina!

 

[earlyretirement]

Absolutely things have slowed down. MANY owners have pulled their properties off the market and just waiting to see what else happens. But the prices haven't sunk even with the low volume. The lack of alternative investments and inability to safely keep your funds in a bank account in Argentina still makes real estate there desirable for the locals.

Also, I personally don't think it's so much as the inability to get dollars because many people already have savings in dollars either stashed under their mattress or especially abroad. The biggest problem I see is AFIP demanding to see from some buyers where their income came to purchase after declaring so little income the past several years.

THAT will really keep the market quiet if they keep doing that. Almost NO locals declare all their income and assets.

 

[Johnny]

Absolutely things have slowed down. MANY owners have pulled their properties off the market and just waiting to see what else happens. But the prices haven't sunk even with the low volume. The lack of alternative investments and inability to safely keep your funds in a bank account in Argentina still makes real estate there desirable for the locals.

Also, I personally don't think it's so much as the inability to get dollars because many people already have savings in dollars either stashed under their mattress or especially abroad. The biggest problem I see is AFIP demanding to see from some buyers where their income came to purchase after declaring so little income the past several years.

THAT will really keep the market quiet if they keep doing that. Almost NO locals declare all their income and assets.

After so many years of winkin', blinkin' and nod regarding laundering and undeclared income, CFK and the AFIP ought to do an "olly olly oxen free". Of course then they wouldn't be able to "punish" the bourgeoisie, which I think is an underlying motive for much of their recent madness.

 

[ElQueso]

After so many years of winkin', blinkin' and nod regarding laundering and undeclared income, CFK and the AFIP ought to do an "olly olly oxen free". Of course then they wouldn't be able to "punish" the bourgeoisie, which I think is an underlying motive for much of their recent madness.

I think you're completely right about that.

But even if they got past their desire to punish and chose to "forgive" all unreported income, I think people who declared their money abroad and under mattresses would also find themselves laid bare in front of the government. I could see rumors of a law coming along after the "forgiving" that would force repatriation of all that foreign-held money (I don't really know if that's possible, or even likely, but who would believe it wouldn't happen and be scared anyway? And access, to a certain extent, could still be controlled), and people who had money here in the country and declared it would be at the mercy of any real laws the government made concerning possession of dollars, both of which would cause people to not declare their money.

I don't see how they can get out of all of this without some problems somewhere, particularly as long as the government is seen as corrupt, untrustworthy and downright crazy by those who have undeclared money.

 

[earlyretirement]

I think you're completely right about that.

But even if they got past their desire to punish and chose to "forgive" all unreported income, I think people who declared their money abroad and under mattresses would also find themselves laid bare in front of the government. I could see rumors of a law coming along after the "forgiving" that would force repatriation of all that foreign-held money (I don't really know if that's possible, or even likely, but who would believe it wouldn't happen and be scared anyway? And access, to a certain extent, could still be controlled), and people who had money here in the country and declared it would be at the mercy of any real laws the government made concerning possession of dollars, both of which would cause people to not declare their money.

I don't see how they can get out of all of this without some problems somewhere, particularly as long as the government is seen as corrupt, untrustworthy and downright crazy by those who have undeclared money.

Actually for those of you that don't know....a few years ago they had a sort of amnesty program. They allowed locals that had unreported assets/cash overseas outside of Argentina to repatriate it back to Argentina and as long as they purchased real estate with it, they allowed them to only pay something like 1% penalty.

I personally had a TON of people I know repatriate millions of dollars back to Argentina when they had that amnesty program. I was really surprised because I didn't think people would want to be in the radar with AFIP but many many people repatriated funds back to Argentina when they had it.

 

[mrporoto]

something has got to give,the cost of property is well overpriced.the markets have highs and then reductions as in much of europe and usa,thats life.

 

[sergio]

What would realistic prices be? During the Menem era when the peso was worth one dollar and housing prices were a FRACTION of what they are now, the gap between salary and purchase price was far far more reasonable. Nowadays for someone to try to save to buy a property, it is just about impossible. That was not the case before. Maybe prices are a bit inflated but by international standards they do not seem wild. Could part of the problem be the low value of the peso in the international market and the high inflation rate?

 

[Dublin2BuenosAires]

How is the rental market ? I have an unfurnished property in Palermo which we'll be renting from the end of next month.

Is it difficult to get properties let out?

 

[ghost]

What would realistic prices be? During the Menem era when the peso was worth one dollar and housing prices were a FRACTION of what they are now, the gap between salary and purchase price was far far more reasonable. Nowadays for someone to try to save to buy a property, it is just about impossible. That was not the case before. Maybe prices are a bit inflated but by international standards they do not seem wild. Could part of the problem be the low value of the peso in the international market and the high inflation rate?

Think really hard about all of the things you consider when buying a home. ie Schools, hospitals, street lighting, sewers, SECURITY, sidewalks, fire and medical, etc and etc. Infrastructure. Now tell me about inflated prices in this market. Value goes beyond the property.