Tough Times Ahead?

[Stanexpat]

Bigbadwolf, I can agree with you. The level of corruption and the lack of checks on executive power really overlay the economic problems. The problem here is you really have had a handful of people calling all the shots. When they jump the tracks there is nobody or institutions to stop them.You're right about the irresponsible U.S. deficits as well. One difference however is that the U.S. at least until now has found people to loan them the money to cover the deficits. Argentina on the other hand in pretty well tapped out and is not exactly viewed as a great credit risk by the rest of the world.

 

[steveinbsas]

I don't believe that Argentina is doomed, but it does have a history of dealing with its problems (at times) in some very ugly ways and at the expense of individual life and liberty. As I've said before, I think its important for those now considering "moving" here to know what has been happening here recently and how quickly things can change. The information I found on line two years ago painted an entirely different picture of Argentina than can be observed today. Would you rather come here and find out that the rosy picture you might read about in business promoting websites or Sunday supplements in US newspapers is far from being accurate?

If writing about the reality of life here creates a "negative vibe" so be it! There are LOTS of negative vibes in Argentina and I'm not referring to expats. I have no desire to leave. I am happy here for a number of reasons.

 

[Stanexpat]

Sorry if my comments or those of others is considered to negative. I thought the thread was discussing the economic situation. Most of the comments seem well considered and factual. I don't see how discussing this should be considered complaining. If people want to come to Argentina they should do so with their eyes open. I have only been relating what's widely available in the press to anyone thats interested. Perhaps somebody should start another thread asking that only positive comments be posted.

 

[perry]

I agree with Soulskier that there is no hope in hades that there will be any crash in Argentina in the near future. South America is booming especially Brazil and this will have a huge effect on our positive growth here.
Yes tourism and investment from United States will decrease but on the other hand toursim from Brazil and from Asia will increase . They are billions of people in China alone who do not know Argentina and with the rise of the middle class there this will directly benefit Argentinas economy

 

[citygirl]

Really? I think there has to be a correction - not saying its a bad thing, just that I think it will happen.
Inflation *is* an issue, like it or not. Salaries haven't been keeping pace with the rise in prices and at some point, that's got to stop.
The oil crisis/weakened dollar will have a short-term impact on tourism from the US. Flights btwn US/Arg have gone up about 80% in a year (my flight last year was approx $900, this year the cheapest I can find is about $1600). In the short-term, if those dollars aren't coming in, I do think it will matter.
Real Estate - the market is a bit crazy. Yes, still a bargain for foreigners but how many citizens are going to be able to save up to buy a place if they're earning in pesos & don't have access to financial tools like mortgages?
Who knows, I certainly don't have a crystal ball but I think there definitely will be a correction of some sort.

 

[steveinbsas]

Flights btwn US/Arg have gone up about 80% in a year (my flight last year was approx $900, this year the cheapest I can find is about $1600).

I just checked AA. and found RT to San Francisco in Sept for less than $1200. In the past few days, my yahoo home page has ads by AA for RT flights between the US and BA starting at $999.00, but I didn't check for details.

 

[perry]

Citygirl I agree with you on many points but unfortunately the real estate market never reflects the real earning capabalities of its inhabitants. How can people afford to pay 1 million dollars for studios in Moscow Russia or 2 million dollar apartments in Tehran Iran wher prices per square metre are now reaching 15000 Us dollars a metre in the desired areas of North tehran. You cannot tell me in Iran that all its citizens are rich and the inflation there is higher than Argentinas by the way.
Prices are determined by supply and demand and there is a small percentage of very wealthy and wealthy argentines who can afford to pay these prices and continue to do so . For them this is the safest investment to make in Argentina as banks are a complete no go zone for all with serious money

 

[steveinbsas]

...the real estate market never reflects the real earning capabalities of its inhabitants. How can people afford to pay 1 million dollars for studios in Moscow Russia or 2 million dollar apartments in Tehran Iran wher prices per square metre are now reaching 15000 Us dollars a metre in the desired areas of North tehran. You cannot tell me in Iran that all its citizens are rich and the inflation there is higher than Argentinas by the way.
Prices are determined by supply and demand and there is a small percentage of very wealthy and wealthy argentines who can afford to pay these prices and continue to do so . For them this is the safest investment to make in Argentina as banks are a complete no go zone for all with serious money

100% spot on! This precisely why apartments in the "better" areas of BA (Recoleta, Palermo Chico, and Puerto Madera) are not likely to decline in price or return to the "historical norm" in the future, as they might in a mortgage based real estate market. Obviously, some foreign buyers have joined the "very wealthy and wealthy Argentines" purchasing properties in these areas, and they are unlikely to "bail out" even if times get a lot tougher than they are now.

 

[Fishface]

They are billions of people in China alone who do not know Argentina and with the rise of the middle class there this will directly benefit Argentinas economy

China is currently 1.3bn - and at most 150 million people have sulplus money and even then it is doubtful they would come here - Thailand is too far - and for most Chinese a day out of China is a day wasted.

 

[citygirl]

Yes but you can't have a sustainable city if there are only one or two enclaves of very wealthy neighborhoods and the rest slide backwards. You need a middle class that LIVES THERE in order to drive civil improvements, security, etc. If the middle class leaves the city to live in more affordable areas (suburbs, etc) - then who will fill these neighborhoods? And if most of the city becomes unsafe, how long do you think those ultra-rich will live in the high priced areas?
(I'm not implying this is the case but it is a worst case scenario)
I came to Bs As from NYC (where I am currently back working for 2 months). Yes, NY prices are out of control, average cost of 1.1 mill for an apt. But lots of people there have mortgages. Lots of people make good salaries. Lots of people will continue to move in to the city. Can the same be said of Bs As? A city can't exist without a vibrant, multi-layered socio-economic structure. And the middle class is the linchpin of that. Look at what happened to a lot of cities in the US over the last 30 years when the middle class fled to the suburbs?