Tough Times Ahead?

[Stanexpat]

I found an article on U.S. housing which predicts a 70% drop in values. Who knows maybe B.A. real estate will end up more expensive than New York or San Fran. Maybe the USA will be the next cheap expat haven.
http://www.oftwominds.com/blogjuly08/70K-median7-08.html?ref=patrick.net

 

[Stanexpat]

"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. "Pericles this is an apple and oranges comparison. I worked for the international division of a large coporation. We had responsibility for everything except the U.S. and Europe. We use to have to find housing for our people in all these places. The problem was always there wasn't much available that met western standards, what was available was very expensive. I remember we had to pay $12,000 a month for a 2 bedroom apartment in Tokyo and this was 25 yeares ago. Almost certainly a lot of the same thing is going on in Moscow and Tehran, a lot of this is housing for foreign excutives, paid for by their employers. Is there a shortage of western style housing in Buenos Aires? Why would a big run up in prices there equate to the same thing here?

 

[ronnyjob]

It's naive to think there's less corruption in the US (or the UK) than in Argentina.

You must be right and everybody else must be wrong

Not really. Just different hands in the cookie jar, taking billions rather than the odd fistful of dollars here and there.Back to the original question - wannabe expats looking for a cheap way to live the high life might have to rethink how they will support themselves. No big deal.

 

[perry]

Stan the demand for properties for properties in Moscow and Tehran do not have any correlation to outside infuluences . Prices are directly correlated to the commodities boom in both of these countries causing real estate prices to spiral out of control.
Tehran Iran is a most interesting subject as there are many parrallels to Buenos Aires Argentina. In the late 1990s Tehran was one of the worlds cheapest cities . Now real estate has reached levels equal to Paris and London. Now can ayone tell me how Tehran Iran is a safe city to invest in or offers the lifestlye of Buenos Aires.
Pirices are due to demand and supply simple. Stan you do you know how few properties are for sale in Barrio Norte? I have many requests for this neighbourhood and what is available for sale is in the main undesirable..

 

[bigbadwolf]

Stan the demand for properties for properties in Moscow and Tehran do not have any correlation to outside infuluences . Prices are directly correlated to the commodities boom in both of these countries causing real estate prices to spiral out of control.

Where real estate prices appear not to be related to wages, one of two influences is operating: 1) there's a two-tier market (as Stan pointed out): the price for a house in Mayfair or Belgravia has no connection to the paltry wages being doled out to the British workforce, but is connected to capital flight by the global rich or 2) there's easy but short-lived access to low-interest loans (as prevailed in the US and UK over the last several years. Thus English couples have been borrowing up to five times joint earnings for literally a hole in the wall. These government-engineered speculative booms eventually come a cropper -- as we can see in both the US and UK (but so anemic have their economies become that they need these speculative fixes to sustain themselves).

Pirices are due to demand and supply simple.

This is a truism. But there may not be one homogeneous market. The demand and supply for property in Recoleta may be different to that in, say, Caballito and Flores. There's some tenuous connection to be sure: rising prices in Recoleta and Palermo influence prices in Belgrano and further afield. But they are still separate markets, and the factors which influence demand may differ. Thus for a less salubrious part of BsAs, wages may be a more important factor.

 

[Grazie]

I would say...tougher times ahead for sure, but we try to survive and make the most of what we have wherever we are. Others have it worst, you know.

 

[MrBart]

Well said Grazie! I think that people have to realise though that inflation is a worldwide problem right now, and not just in Argentina.

 

[Stanexpat]

PericlesI cann't say I am in agreement with your arguements. I don't know much about Tehran but for Moscow I think it's safe to say after 70 years of communism there isn't much housing (to western standards) available(yet). The average person there makes only $300 a month and I doubt these are the buyers of the million dollar apartments. The commodity boom there is in gas and oil. My guess is that these ultra expensive apartments are occupied by a handful of Russians who got in on the boom and the balance are expat executives, technical experts, and other business people, selling services and equipment to support gas and oil production. For most of these people their companies are paying the rent or purchasing the unit. Under normal circumstances none of these people or companies would be willing to pay these prices.I don't see the same type of commodity boom occuring here. Even if one did occur there are many areas with decent housing besides Barrio Norte that would prevent prices from spiraling out of control as has happened in Moscow.

 

[Fettucini]

I don't see the same type of commodity boom occuring here. Even if one did occur there are many areas with decent housing besides Barrio Norte that would prevent prices from spiraling out of control as has happened in Moscow.

I disagree, I think that is what is driving property prices in Buenos Aires at the moment, the commodity boom of agricultural products that are reaching record prices around the world. Argentina is lucky in that aspect having some of the best agricultural land in the world and a lot of it, and if this world recession resembles anything to that of the 70's, commodity prices will continue to be high for quite some time, possibly go even higher. A lot of the money being made from that sector I think is being put into property in Buenos Aires, rather than risking putting it in the Argentinean banks.

 

[mini]

Quote steveinbsas: "I wonder who many wannabe expats who read this (or articles like it)
will still decide to "move" to Argentina in the near future?" First, I'm not an expat nor a wannabe expat, but to answer your original question about coming to Argentina in the near future: Yes. We are on the way. We will be there in October for a local contract on a local salary. We'll just have to see what happens!