In the last two years, at least for gringos from Los Angeles. It appears that the international housing inflation crisis has its epicenter in L. A. And Orange counties.
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In the last two years, at least for gringos from Los Angeles. It appears that the international housing inflation crisis has its epicenter in L. A. And Orange counties.
Today I attended the "Invest Show 2006" at the Sheraton Hotel & Convention Center in Porta Madreo, $20 peso's admission.
About half the booths were selling investment real estate in Buenos Aires, with promise's to rent it out for you after you bought them for all cash. You could buy anything from one apartment to a whole building under construction. Another quarter were selling Condo's in Miami, even one scam selling Condo's in Las Vegas of all places. The best price I could find was $900 dollars per meter for new construction here in B. A.
But I didn't go there to invest. I went for the Chica's, it was sorta like hanging out at the "Duty Free Shop" at the airport without the pressure of waiting for an airplane that's going to kick your ass all night long.
I'm going back tomorrow.
Exon
Title: WSJ. Com - Argentina's Real-Estate Boom Shows No Signs of Slowing Down.
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I came across this brief report by the Center of Advanced Studies of Universidad Argentina de la Empresa. Some real estate data is presented, but there are some big hiccups in some of the monthly trends. Building permits and property/rent values have consistently increased year over year but the supply figures don't jive.
The real estate market is driven by foreigners who purchase property here. Tourism is the number one business in the country. Many people see prices as a real baragin compared to the prices in their own countries. Which is true. Compare an apartment price here with one in London or Madrid or Paris.
When there is a downturn in the economies of USA and Europe, Argentina will suffer more. I can imagine thousands of vacant places with no buyers. Geez, I see thousands of "for sale" signs now.
Kirchner is in NY asking the big companies to invest here. They are pointing out the lack of utillity rate increases, the bond default, certain affilliations with leftist presidents and a pending energy crisis. I don't imagine there will be a postive reply. The nature of the beast here is just too inconsistent.
I know it's grown, but is tourism is the number one business in the country?
Prices in London are outrageous, they make New York seem cheap. But prices in many parts of the continent, Paris, Rome, and Madrid included, were amazingly low last time I checked. Not so hard to find decent apartments there for <US$200k.
It does seem, however, that many Argentina figures are skewed by the most expensive developments where foreigners are buying. In a recent article, the developer (Puerto Madero) said that 50% of his sales were to foreigners and some prices were US$280/ m2. That prices out about 97% of the locals and the vast majority of Americans.
What are the tax structures like for buying property, can a foreigner own property in Argentina?
Would buying property there be worth the occasional visit and to hold onto?
Anything Like IN LA or Vegas where they have "nice touristy areas" Beach Property etc?
DH,
Neither of those links work! And all of that sounds great (currently my tongue is in my cheek)
Lunico
Front page article today in the Clarin that AFIP is proposing a law to eliminate cash only real eastate transactions sometime in 2007. Gov't is concerned about laundering money, underreporting tax liability and proposes that transactions be completed with checks, bank transfers or credit cards (I'd like to put a 150g charge on my Visa please, 6 pagos sin interest)
Real estate sector is up in arms claiming it will lead to a recession (good for the dollar I guess) I agree that closings should be more professional - dumping stacks of hundreds on a desk is third-worldish. My concerns would be the banking system is so shitty. I guess you would be handing over a certified check from your home country and let the seller figure out what to do with it.
After having gone through a cash transaction, I now find myself worrying that the gov'ts attempt to clean up this system and implement modern finacial procedures may screw it up more. The lack of title insurance and confidence in financial institutions makes me wonder how it will all work out because sellers here want cash in their pockets when they hand over the deed. I cannot imagine them giving you a deed for a cashier check or trying to coordinate the bank transfer so that both parties are secure.
Imagine you initiate a transfer and set the closing for a week later when the money will be in the sellers account. Come closing time no one else shows up, claiming some bullshit fraud on your part and their right to keep your money or simply disappearing. Try and get money back in this system!
Kudos to the government.
Those of us old enough to remember the 2001-2002 devaluation and corralito remember that a business crisis was predicted due to the new cash restrictions.
Entities that wished to continue business slit their wrists but then did the unthinkable in order to survive. They began accepting checks, transfers, and credit cards and eventually realized it wasn't so bad after all.
[QUOTE=Thomaso276]The lack of title insurance and confidence in financial institutions makes me wonder how it will all work out because sellers here want cash in their pockets when they hand over the deed. I cannot imagine them giving you a deed for a cashier check or trying to coordinate the bank transfer so that both parties are secure.[/QUOTE]What's needed is a trusted escrow agent. In the U. S. typically it would be a lawyer or title company. In Argentina, presumably the escribanos or casas de cambio will offer escrow services.
Are checks (ordinary or certified) used at all in Argentina?
Checks are used for business transactions (don't know about real estate) but foreigners cannot open checking accounts. I believe you can have a savings account with a CDI which is easy to get.
Don't know about certified checks, if they even have them.
You hit it right on using the word "trusted". No one here trusts anyone else and for good reason. They do not trust the gov't or banks most of all. Hell, I don't trust myself sometimes!
Yes they have certified checks here, but they still are NOT used for property purchasing. I sold my car a year ago and the guy gave me a certified check. What it means is their bank puts aside the amount of the check and takes responsibility for the amount of the check. All with Bank Boston. But I wouldn't do a real estate transaction using certified checks. No way. Just cash OR in some cases if the sellers and buyers, by coincidence use the same financial institution both parties can get on the phone and do a wire transfer getting the confirmation while ON THE PHONE that it was realized. The typical way is CASH on the table! My people deliver direct to the office where signing is taking place. This way we don't walk around with $$$
The official at my bank tells me that a person MUST reside here in Argentina AND have some utility in their name. AND must have the account for 6 months in good standing BEFORE you can do a transfer. THEN they give you about 4 pages of "red tape", (tramites) to fill out in order to get your wired money. It's a pain in the ass!
In Puerto Madero there are hundreds, maybe thousands of new apartments going up and they aren't selling. The real estate offices around here are empty. If you haven't noticed, apartment prices have stagnated even while thousands of new places are coming online. Bubble: everybody wants to becomes an architect, everybody is an investor in real estate, new buildings are everywhere, those apartments on the market aren't moving and everybody talks about housing and wants to own an apartment that can be rented to foreigners. Anybody who doesn't think we're in a bubble is in deep, deep denial.
[QUOTE=Sinistra]In Puerto Madero there are hundreds, maybe thousands of new apartments going up and they aren't selling. The real estate offices around here are empty. If you haven't noticed, apartment prices have stagnated even while thousands of new places are coming online. Bubble: everybody wants to becomes an architect, everybody is an investor in real estate, new buildings are everywhere, those apartments on the market aren't moving and everybody talks about housing and wants to own an apartment that can be rented to foreigners. Anybody who doesn't think we're in a bubble is in deep, deep denial.[/QUOTE]The real answer is no one is buying and take a look to the Palermo Hollywood Towers, no one is working anymore in there. Marketshare in BA in my experience over-reacts to any small thing. I can't tell you if Puerto Madero is a bubble or not a bubble, but I can tell you that I have made a very good deal in Puerto Madero. Of course, the key is to risk. Some of the fellas I speak to, they want to make a lot of money, without risking, without working and in a super-safe environment. All right, the reality it's sometimes you'll make it, and some times you'll not. I have sold a pre-con in Puerto Madero and almost duplicated the capital in less than 2 years. Of course, those 2 years sweating like a horse, but, anyway, the key is to work and research a lot, and buy cheap, like gipsies does, yes I learned from gipsies buying cheap and selling expensive if possible, but, if not possible, you can get out of it without deep wounds.
What's better than Puerto Madero? San Telmo stills cheap, and if the city gov makes a few changes San Telmo and part of Barracas it's going to be Puerto Madero's extension.
MCSE's free R. E. Consultant advise.
[QUOTE=MCSE]What's better than Puerto Madero? San Telmo stills cheap, and if the city gov makes a few changes San Telmo and part of Barracas it's going to be Puerto Madero's extension. MCSE's free R. E. Consultant advise.[/QUOTE]Doubling your money over a couple years ago is great, but 2008 is not 2006 and certainly not 2004. A "good deal" in PM I saw was 90m sq for about $300k and most places are a lot more. Will that be worth $450k or $600k in a couple years? That's more than almost any city in the US and prices there are going in the other direction. There's still more downside risk than upside opportunity. Prices are already as high as many European cities. You can get a downtown Miami condo nearly identical to a Puerto Madero one for less money (though condo fees are higher in Miami) While opportunities may exist, there are opportunities in other places too and tying up hundreds of thousand of CASH equity is insane at this point. I locked in a decent rental price for a couple of years and am going to ride this thing out. There's more upside in the markets now than in BA real estate and it's a hell of a lot more liquid.
[QUOTE=Peter Europa]I do think there are some good oportunities in San Telmo or Barracas (new appartments! But it just will never be Puerto Madero.
It's old, shitty, dark, dirthy, it stinks, it's full of cartoneros and it's not safe.[/QUOTE]I've spent alot of time in San Telmo and it is as safe, or more safe than many other areas. Lotta dogshit-yes. I've seen more cartoneros in Congreso. A little dirty-yes. Who gives a fuck. I ain't sleeping in the street. As for dark, the streets are lit. The ongoing idea with some that San Telmo is more dangerous than most barrios is absolute bullshit. I've seen more snatch and grabs in Centro, Recoleta and Palermo. I've been harassed by more beggars, panhandlers and generic scumbags in Centro and Congreso by far. It is not the perfect area in which to live, but that has more to do with lack of decent grocery stores (though a nice place opened recently on Independencia between Defensa and Bolivar) and the fact that it can be loud unless you search and find a place a little off the beaten path.
And yes, it will never be Puerto Madero. That is a good thing.
I have been looking at the economics associated with buying vs selling. I am now in a "special" apt in a prime recoleta neighborhood (right next to Las Heras why Pueyrredon) Other side pueyrredon than Madaho. These digs are a penthouse (13th floor) with a skyline view and slight view of "Rio de Plata."
Rent: U$D1100 per month.
Market Value - $400K (I have been doing my homework)
If US buyer buys at $400K
Rental cost per annum $15,000 (conservative estimate - account seasonality)
US Cost of capital (say 6%) [cost of money in us - borrow rate]
400,000 * 6% = $24K US.
Rent is still a bargain and purchase price too high.
My humble opinion.
Jaggar
But you need to add a much higher percentage for AR country risk, vacancy, taxes, and repairs. Personally, I woudn't buy it unless I netted 15-20%! Don't dismiss that we are in the midst or a severe decline in world real estate prices. Forget the ''giddy''days of the last several years.
This makes sense and if we use a 15% hurdle rate, a property that sells for $400K would have to yield $60K in annualized rental revenue (or a whopping $5K per month) What can you rent in B. Aires for 15,000 pesos per mes?
Thoughts well appreciated supporting purchasing (Tu compras) property in be. Aires. Even a $80K place in San Telmo.
Jaggar
Greetings,
Considering the seeming inevitability of the nex AR economical crisis, what are forum readers views and experience regarding the possible decline of real estate values then? Particularly I am interested in attractive land, like northern Pagagonia, and such.
Many thanks!
In many countries owning property is a sound investment. Usually the property appreciates and there are well defined laws which protect your investment.
Argentina is not one of those countries. By and large, if it flies, floats, fucks or is located in Argentina rent it, don't buy it.
It is incredible but true. If you own property in Argentina and somehow homeless people are able to break into that property (house in Buenos Aires or a farm in Patagonia) it will take the courts several years to evict the squatters. By that time you will be, lucky to have anything that resembles the property you once owned.
If you ask Argentineans why they have no respect for property rights they will look at you in a puzzled manner as if to say "Isn't it this way everywhere?"
Argentina is the country that time forgot. Argentina has peculiar ideas and concepts similar to an island inhabited by dinosaurs.
I
Recognize squatters' rights, but have methods to more quickly determine whether the title holder has lost thier rights to the property or still maintains title to the property. The difference is that it takes 5 to 7 years to resolve this type of situation in Argentina. In Florida you might need 6 months to one year.
Assuming both sides have competent attorneys.
This court system and sqatter's rights are the real reasons why there are not mortgages widely available in Argentina. Mexico and Brazil changed their laws over the last few years and magically a broad based mortgage industry was born in both countries.
What's the deal with building permits?
If you own a plot of land, what's the situation with building on it?
Assume you can:
A) Buy a plot of land.
Be) Hire a builder to erect a house on it without seeking permission first.
C) Hire a decent layer.
Does that mean that, because legal decisions are generally delayed by 5 to 7 years in Argentina, a person can build a house without permission, and live in it for 5 years?
Presumably after 5 years you might get a demolition order but hey, you got to live there for 5 years!
I wasn't able to find anything about this with my ability to search the forum for it.
I am a US citizen. I don't have resident status in Argentina. I stay there 6 to 7 months per year.
I own 2 places in Bs As and want to sell one.
My accountant in Bs As has told me that the AFIP requires a "certificado de residencia en el exterior" to sell property and without this certificate, I can't sell it.
I have to get this certificate from, in my case, the Argentine consulate in Los Angeles.
I don't own or rent anything in the USA. I stay with friends the 2 to 3 months of the year I am there. I use their address for my USA mailing address. I don't receive any bills, or anything else at this address, that the consulate will accept as proof of residence and so they won't give me a certificate. The person I talked to at the consulate also told me that I don't need this certificate to sell property.
I don't know whether my accountant, or the guy at the consulate is mistaken, so I don't know what to do next. The accountant insists that I must have this certificate.
Any non Argentine resident who has sold property there have any ideas?
Thanks
Airplane,
I sold my first property here in October 2006, and maybe things have changed, but then it was pretty straightforward. No requirements for proof of residency abroad, but I had to go to the AFIP to get a declaration that I owed no taxes, and because I'd stated I was divorced, had to get an official statement of this from my home country. That was pretty complicated as it was 20 plus years ago. Had to go through the "Apostille procedure" and get an official translation. But proof of foreign residency, no.
[QUOTE=Sidney]All because of bureaucratic problems. Finally, he gave up in disgust! In the future, expect more problems and a more confiscatory modus operandi! DO NOT BUY IN AR![/QUOTE]What about if someone just wanted to own a *home and not care about having it as an investment. Would you still buy?
Example: A young guy like me (40) has a few pennies but not many. He goes to south america all the time and leaves his apartment empty in NYC.
Maybe he gets the backing to purchase an apt in BA of up to roughly 100k. He can then be assured he owns a home. He lives in BA (half way to civilization) and takes month long trips to lima colombia or some other budget location. He rents out the apartment (maybe) when he is gone.
Is this guy (me!) losing anything in your humble opinion?
There has to be some benefit to owning even if it's in argentina. Right?
[QUOTE=Artisttyp]What about if someone just wanted to own a *home and not care about having it as an investment. Would you still buy?
Example: A young guy like me (40) has a few pennies but not many. He goes to South America all the time and leaves his apartment empty in NYC.
Maybe he gets the backing to purchase an apt in BA of up to roughly 100k. He can then be assured he owns a home. He lives in BA (half way to civilization) and takes month long trips to lima colombia or some other budget location. He rents out the apartment (maybe) when he is gone.
Is this guy (me! Losing anything in your humble opinion?
There has to be some benefit to owning even if it's in Argentina. Right?[/QUOTE]Yea You're "Nuts" or have more money than brains, rent the Apartment on a long term basis, two years or more.
There's another "Crisis" coming and Argentine real estate will go in the tank.
Exon
[QUOTE=Exon123] There's another "Crisis" coming and Argentine real estate will go in the tank.
Exon[/QUOTE]Oops for a moment I thought I was on the U. S. Economy thread.
[QUOTE=Exon123]Yea Your "Nuts" or have more money than brains, rent the Apartment on a long term basis, two years or more.
There's another "Crisis" coming and Argentine real estate will go in the tank.
Exon[/QUOTE]But isn't "crisis" a good thing on my end? As I stated I would be buying a home not an investment. Some might say a home is an investment but I look at it more as shelter.
I just can't get over the amount of money I've spent on rent in NYC. I could have owned buy now. That is where my "nuts".*more "BRAINS" than money attitude comes in. I haven't been able to consider moving until very recently.
The problem I am running into with renting in foreign countries is visas and all that crap. I know you can dodge the officals for awhile but eventually it will catch up with you. I want to be legit in SA. I don't want to be scurrying around to find someone to rent me an apt under the radar. The reason my trips have been so sucessful are that I plan and organize well. Also my papers are in tact. I want to move freely without any worries of having to bribe officials to get in and out of countries etc.
I am not a huge fan of Argentina although I like it there. I am just thinking it might be a good place to use as a base camp in SA. Lima is great but winter sucks. Medellin has great pfp but I would slit my wrists out of boredom. Brazil is too expensive. I've gone down the line with all the SA countires. Where there is pussy there isn't decent food or the other way around. There are many ways to spoil the fun.
I would love to spend time in all those places but not own or be tied down with a visa. Why? It gets old really fast. But I would have "shelter" in BA and some of the ammenities I am used to. Even living in BA you guys lack stuff. Heinz Ketchup anybody?
Would owning in Colombia or Peru be any safer? I am not in the real estate business but I wouldn't think so. Brazil would be great but I don't have a brazil budget.
Also I must say that budget monegring in BA price wise is on par with most SA budget locations minus the $6 desperation fucks of Peru, Bolivia and Ecuador. Medellin would be a step up but there has been times the peso was NOT in my favor and was only a few dollars less than a BA budget fuck.
I don't have alot of experience with these types of situations BUT I am learning.
Maybe you don't understand my situation.
I'd love to hear more opinions.
Thanks.
Artisttyp
[QUOTE=Sidney]Rent, don't buy in AR. We have recommended this for years! My landlord, a minor speculator, owns 4 very nice apartments. Only mine is rented. The same is true all winter. Anyway, I'm leaving asap, for 3 months or permanently![/QUOTE]Where would you move to and why are you moving? This would tell us alot more.
Are you guys miserable in BA? What do you guys see outside of BA that is making you think "get out"?
If a crisis happened again wouldn't you guys be living large?
[QUOTE=Artisttyp]I'd love to hear more opinions [/QUOTE]I experienced a very sobering moment about the politics / economics of Argentina. My sweetheart showed me a shoe-box full of $1,000.000.00 peso notes that are completely worthless. They were her Grandmother's life savings. Within her lifetime, everything, and I mean everything was gone. Just the thought that it could and probably will happen again dampened any thoughts of me purchasing any hard assets in Argentine. I enjoy the heck out of Buenos Aires, but no thank-you. A Gringo would be very low on the food chain in my view when they try to sort things out. For me, the risk is greater than the reward at this time. Maybe in the aftermath, but like many, there is a storm a brewin. Do hope I am wrong in my assessment.
[QUOTE=Damman]I experienced a very sobering moment about the politics / economics of Argentina. My sweetheart showed me a shoe-box full of $1,000.000.00 peso notes that are completely worthless. They were her Grandmother's life savings. Within her lifetime, everything, and I mean everything was gone. Just the thought that it could and probably will happen again dampened any thoughts of me purchasing any hard assets in Argentine. I enjoy the heck out of Buenos Aires, but no thank-you. A Gringo would be very low on the food chain in my view when they try to sort things out. For me, the risk is greater than the reward at this time. Maybe in the aftermath, but like many, there is a storm a brewin. Do hope I am wrong in my assessment.[/QUOTE]What you say makes sense.