Building HOA expenses in Buenos Aires rose 88% from January to June 2024

[Finance Prof]

With inflation it has been rough. Building HOA monthly expenses have gone up 88% from January to June 2024. the year on year increase is 272% increase. Ouch.

I see that trend in my apartment. Fees have gone way up more than these figures. Mine just this year have gone up 150%. Probably headed even higher. What is worse is I'm starting to see people in my building fall way behind and stop paying expenses so that is going to put a burden on the rest of the owners to pay the bills.

Las expensas en edificios de CABA acumulan una suba de casi 88%

Limitan el uso de luminarias en espacios comunes y de la caldera

www-baenegocios-com.translate.goog

 

[Betsy Ross]

With inflation it has been rough. Building HOA monthly expenses have gone up 88% from January to June 2024. the year on year increase is 272% increase. Ouch.

I see that trend in my apartment. Fees have gone way up more than these figures. Mine just this year have gone up 150%. Probably headed even higher. What is worse is I'm starting to see people in my building fall way behind and stop paying expenses so that is going to put a burden on the rest of the owners to pay the bills.

Las expensas en edificios de CABA acumulan una suba de casi 88%

Limitan el uso de luminarias en espacios comunes y de la caldera

www-baenegocios-com.translate.goog

Mine have gone way up also. That is the trend across all of Buenos Aires. Mine have gone up about 140% this year and YOY about 300%. So far, people in my building aren't more than a month behind but several people pay late. I have a friend that is in a building where they are so far behind on their water bills and the interest and penalties is now more than the actual water.

 

[Vince]

These numbers probably match the 300% annual inflation we've seen over the past year. It will probably get much worse. Utility companies ended subsidies and raised the prices tremendously over the past few months. That not only affects individual owners but also the building in general to heat and also lights for common areas. Utility companies will probably raise rates even higher as they are still much lower than other countries.

I notice in my building several people are falling behind in their expensas.

 

[Blockchain]

Jesus you hear about inflation but I can't imagine my HOA fee jumping up 300% in one year. Brutal! How do you see your neighbors are defaulting? Is this listed on your individual statement? You can see how delinquent all your neighbors are??

 

[Vero]

Painful Mine have gone up 125% so far since January. Since last year about 280%. I talk to more and more friends that are seeing problems in their buildings. Many buildings are having big problems now with this.

 

[earlyretirement]

Definitely monthly HOA expenses are one of the things that has gone up about 300% over the past year. In one apartment I own in Palermo Hollywood, I paid 125,000 pesos in January and my last bill was 278,000 pesos per month which is about $200 US dollars per month at today's exchange rate. However, in over 11 years of owning it IIRC, it was about $125 USD a month when I first bought it in 2013 so not too bad over a decade.

That is a building with 24/7 security and doorman around the clock, pool, small gym, sauna. It's 1 bedroom. A tiny fraction of what it would cost in the USA. Like the others, I notice many people in the building are behind on their expenses.

@Blockchain, yes you can see all the owner's names and how much in debt they are each month. You can see an example of what an HOA bill looks like here:

What all is included in monthly HOA expenses on ZonaProp listings or for condos in Buenos Aires?

I was curious what all is included in the monthly expensas for listings I see on Zonaprop? For example, I am looking at this $295,000 USD property and it says the monthly HOA fees are only 55,000 pesos per month. Can that be right? I will ask my realtor but I was curious from those of you...

www.expatsba.com

 

[Wally]

The biggest jumps up are buildings that have doorman or security guards. This is expensive. Mine have also gone up but about 200% since last year.

 

[earlyretirement]

The biggest jumps up are buildings that have doorman or security guards. This is expensive. Mine have also gone up but about 200% since last year.

Exactly. Doormen are a part of one of the strongest unions in Argentina. Security staff is expensive too. The building I quoted above has 24/7 security guards. But a factor of how high the expenses is also how many neighbors you have splitting the bill. In some small buildings where there are only a few units, bills can really add up. Especially if they have a portero that has worked there a while.

Also, some buildings have horrible administrations where there is a lot of corruption or they are stealing from the owners. Buildings that are efficient, without 24/7 security staff are still very reasonable. Case in point, I have an apartment that I purchased in 2002 after the corralito in Recoleta. It was one of the first apartments that I purchased. It's one bedroom and there are only 3 units per floor. In peso terms rent has exploded since the exchange rate back then was only 3 pesos to $1 USD.

I don't have any of my old bills from back then but I remember the HOA bill being around $60 USD per month. In pesos it was around 200 pesos per month. Fast forward 22 years and it's now 138,00 pesos per month. But in USD terms it's only around $91 USD per month. For a local earning in pesos with the median income probably only around less than $500 USD per month, that is a big chunk of their monthly income.

This is a good example of why Argentina is a great place for people to retire from the USA on fixed incomes or Social Security payments. The key is to have a paid off place where you don't have to worry about fluctuations in rent. You still have to worry about HOA fees but in USD terms it's still very reasonable even after 22+ years of ownership.

 

[Blockchain]

Definitely monthly HOA expenses are one of the things that has gone up about 300% over the past year. In one apartment I own in Palermo Hollywood, I paid 125,000 pesos in January and my last bill was 278,000 pesos per month which is about $200 US dollars per month at today's exchange rate. However, in over 11 years of owning it IIRC, it was about $125 USD a month when I first bought it in 2013 so not too bad over a decade.

That is a building with 24/7 security and doorman around the clock, pool, small gym, sauna. It's 1 bedroom. A tiny fraction of what it would cost in the USA. Like the others, I notice many people in the building are behind on their expenses.

@Blockchain, yes you can see all the owner's names and how much in debt they are each month. You can see an example of what an HOA bill looks like here:

What all is included in monthly HOA expenses on ZonaProp listings or for condos in Buenos Aires?

I was curious what all is included in the monthly expensas for listings I see on Zonaprop? For example, I am looking at this $295,000 USD property and it says the monthly HOA fees are only 55,000 pesos per month. Can that be right? I will ask my realtor but I was curious from those of you...

www.expatsba.com

Thank you so much for the explanation! That is interesting about listing names and delinquent amounts on the bill. I guess it would be uncomfortable being in the elevator if everyone knows you are behind. I doubt you would ever see anything like that in the States with privacy concerns. But I guess you can always see if someone is behind on property taxes as that is public record but you have to look it up.

Exactly. Doormen are a part of one of the strongest unions in Argentina. Security staff is expensive too. The building I quoted above has 24/7 security guards. But a factor of how high the expenses is also how many neighbors you have splitting the bill. In some small buildings where there are only a few units, bills can really add up. Especially if they have a portero that has worked there a while.

Also, some buildings have horrible administrations where there is a lot of corruption or they are stealing from the owners. Buildings that are efficient, without 24/7 security staff are still very reasonable. Case in point, I have an apartment that I purchased in 2002 after the corralito in Recoleta. It was one of the first apartments that I purchased. It's one bedroom and there are only 3 units per floor. In peso terms rent has exploded since the exchange rate back then was only 3 pesos to $1 USD.

I don't have any of my old bills from back then but I remember the HOA bill being around $60 USD per month. In pesos it was around 200 pesos per month. Fast forward 22 years and it's now 138,00 pesos per month. But in USD terms it's only around $91 USD per month. For a local earning in pesos with the median income probably only around less than $500 USD per month, that is a big chunk of their monthly income.

This is a good example of why Argentina is a great place for people to retire from the USA on fixed incomes or Social Security payments. The key is to have a paid off place where you don't have to worry about fluctuations in rent. You still have to worry about HOA fees but in USD terms it's still very reasonable even after 22+ years of ownership.

Very very interesting about the HOA bill being almost the same over 20 years. We would never see anything like that here in the US. I guess the key is having dollar savings or income.

 

[Bob]

Exactly. Doormen are a part of one of the strongest unions in Argentina. Security staff is expensive too. The building I quoted above has 24/7 security guards. But a factor of how high the expenses is also how many neighbors you have splitting the bill. In some small buildings where there are only a few units, bills can really add up. Especially if they have a portero that has worked there a while.

Also, some buildings have horrible administrations where there is a lot of corruption or they are stealing from the owners. Buildings that are efficient, without 24/7 security staff are still very reasonable. Case in point, I have an apartment that I purchased in 2002 after the corralito in Recoleta. It was one of the first apartments that I purchased. It's one bedroom and there are only 3 units per floor. In peso terms rent has exploded since the exchange rate back then was only 3 pesos to $1 USD.

I don't have any of my old bills from back then but I remember the HOA bill being around $60 USD per month. In pesos it was around 200 pesos per month. Fast forward 22 years and it's now 138,00 pesos per month. But in USD terms it's only around $91 USD per month. For a local earning in pesos with the median income probably only around less than $500 USD per month, that is a big chunk of their monthly income.

This is a good example of why Argentina is a great place for people to retire from the USA on fixed incomes or Social Security payments. The key is to have a paid off place where you don't have to worry about fluctuations in rent. You still have to worry about HOA fees but in USD terms it's still very reasonable even after 22+ years of ownership.

Crazy that kind of inflation in pesos over 22 years. I am amazed that in dollars it hasn't gone up too much. What about utility bills over the years. What has it been like? Do you know @earlyretirement?

 

[earlyretirement]

Crazy that kind of inflation in pesos over 22 years. I am amazed that in dollars it hasn't gone up too much. What about utility bills over the years. What has it been like? Do you know @earlyretirement?

Utility rates have always been super cheap in Argentina since I started going down there after the corralito. I don't have really old bills but it's always been very low. Now, rates will have to go up. Rates have quickly gone up but they will need to continue going up over the next few years.

Here is an electricity bill from 2009. It is for a 2 month billing cycle. Back then, the government was subsidizing rates. Most of those subsidies have now ended for most people. Without the subsidies, it would have been 305 pesos. At the time the exchange rate was 3.81 pesos to $1 USD so that would have been around $80 USD for the 2 months. With the subsidy, it was 158 pesos or around $40 USD for 2 months.

You can see at the bottom of the utility bill it shows what the typical cost of energy is in Montevideo, Uruguay and it would have been the equivalent of $276 USD.

 

[Pink Panther]

My condo bill has gone up over 270% in the past year in pesos. Extremely tough.

 

[David]

Seeing the sheer destruction of the power of the Argentine peso in these examples is an eye opener. From 3 pesos to 1,440 pesos to $1 US dollar is mind-boggling. I don't know how the Argentines do it?

 

[Che Vos]

My monthly expensas also go up very much. It more than double in short time. This can't keep going up. All the people won't pay if it keep going up. In my building half the people don't pay on time. Many people lose job now. Bad time to raise bills.

 

[MikeYoung]

Everyone I'm confident has had their condo bill go up. Mine just from April to June went from 120,000 to 245,000 pesos. No signs of expenses slowly down. Doorman has been in the building for a long time I am told. These kinds of jumps up are difficult as I didn't budget for these kind of changes.

 

[CraigM]

So how does this non payment problem get resolved? In the US unpaid HOAs eventually lead to liens and foreclosures and en masse it can create a lot of distressed sellers. But that is also when the government steps in, at least it has over the last 20 or 30 years because no administration has the stomach to weather another crisis like the RTC days.

 

[MikeRoss]

So how does this non payment problem get resolved? In the US unpaid HOAs eventually lead to liens and foreclosures and en masse it can create a lot of distressed sellers. But that is also when the government steps in, at least it has over the last 20 or 30 years because no administration has the stomach to weather another crisis like the RTC days.

My friends also live in buildings where people must be late on their bills. In my friend's apartment when I go up in the elevator there is a note about people paying late.

 

[Betsy Ross]

So how does this non payment problem get resolved? In the US unpaid HOAs eventually lead to liens and foreclosures and en masse it can create a lot of distressed sellers. But that is also when the government steps in, at least it has over the last 20 or 30 years because no administration has the stomach to weather another crisis like the RTC days.

It's difficult here @CraigM because any judicial type process is very slow here. In the building I lived in previously, one owner was behind for years and years. She never had any money to pay it. All of the owners in the building had to cover her portion and it wasn't until the woman died many years later that all the owners got their pro-rata contributions back.

Most owners eventually pay up because the HOA levies high interest penalty if it's not paid on time. Buildings can take legal action but it takes years to resolve. I have never heard of anyone getting kicked out of the building for not paying on time. The system here in Argentina isn't like back in the States when it can easily get foreclosed on. Hopefully this improves in the future.

I have read of some buildings where so many people are late paying water company that the interest and penalties are more than the actual HOA bill. Typically HOA's prioritize what needs to get paid first.

 

[earlyretirement]

So how does this non payment problem get resolved? In the US unpaid HOAs eventually lead to liens and foreclosures and en masse it can create a lot of distressed sellers. But that is also when the government steps in, at least it has over the last 20 or 30 years because no administration has the stomach to weather another crisis like the RTC days.

It's difficult here @CraigM because any judicial type process is very slow here. In the building I lived in previously, one owner was behind for years and years. She never had any money to pay it. All of the owners in the building had to cover her portion and it wasn't until the woman died many years later that all the owners got their pro-rata contributions back.

Most owners eventually pay up because the HOA levies high interest penalty if it's not paid on time. Buildings can take legal action but it takes years to resolve. I have never heard of anyone getting kicked out of the building for not paying on time. The system here in Argentina isn't like back in the States when it can easily get foreclosed on. Hopefully this improves in the future.

I have read of some buildings where so many people are late paying water company that the interest and penalties are more than the actual HOA bill. Typically HOA's prioritize what needs to get paid first.

@BetsyRoss is correct. In 22 years of buying and owning real estate and purchasing for hundreds of foreigners, I've never seen any owners get kicked out of a building. In one apartment I own in Recoleta when I first bought it, a woman was years late paying. And my lawyer told me most likely all the owners in the building would need to pay her share until she get foreclosed on or she died (whichever came first) as they already had a lien on her property but with the laws it is difficult to get people kicked out of their properties.

I was ok with that risk as her HOA bill was only around $100 USD per month and there were 24 owners in the building. I still own that property. About 5 years after I purchased it, true to what the lawyer told me, she did die and after that eventually her estate had to pay all the back payments, penalties and interest. All the owners got their pro-rata refund.

It's wise to see the status of HOA payments before you purchase a property so you can see the general health of the owners. You can see each month how far behind people are.

 

[CraigM]

That's good perspective, even if half of the 24 owners were late it would just mean your HOA goes to $200 a month for awhile and you'd get it all back eventually. Not ideal but not the end of the world.