Economy What will the cost of living increases be for August 2024 (Utilities, transportation, rent, etc) ?

[earlyretirement]

$20,000 for home owners? These must be multi-million dollar mansions. I can't imagine paying that for homeowners coverage. Maybe a high fire risk area? I am glad I left California long ago. But then again I just looked on Zillow what my old house is worth now. I about lost it. I did not realize home values have gone up so much there. I haven't looked in a while. How accurate is Zillow in Southern California? I lived in Newport Beach before.

Yes, to be fair, these houses are larger multi-million dollar houses that are getting the insane quotes. But still I just think that is crazy for an insurance premium on your house to go up that much in one year. It is quite shocking.

If anything in much of California Zillow rates are probably lower than what you can get. My brother just sold his house and he got over the Zillow values. And not by a little. By quite a bit. I don't know if that is the norm. The estimates on all of these websites are all around the same now. Redfin, Zillow, Realtor.

I am not sure about all of California but at least in San Diego in desirable gated communities not too far from the ocean, the values on Zillow are probably low. For example, all throughout COVID my neighborhood got unsolicited letters from people in the Bay Area all offering to buy houses from most of the neighborhood. Several of my neighbors sold at what I thought were crazy prices. But that is still continuing today.

What I noticed is there are a lot of affluent people moving into San Diego. Salaries here haven't gone up much at all over the past few years but the real estate values here have skyrocketed. You are getting tons of people from around the world moving here. Most of them are just paying cash. I see the same thing happening in the future with desirable cities and neighborhoods.

We are seeing houses flip even just a year in. One of my neighbors sold his house and the people buying it flipped it in less than a year after buying it and made a few hundreds of thousands of dollars. I'm just waiting for my kids to finish school and most likely will move back to Buenos Aires full time or there and Spain part of the year. Many people eventually throw in the towel on California as desirable and great as the weather is.

 

[Betsy Ross]

My sister lives near Santa Barbara and she echos everything you all are mentioning. She loves it. Great weather, loves the lifestyle. But both her and her husband both work and she jokes if either of them lost their jobs they would be hosed. I visit her every other year. Love the weather there and beautiful but I can't see how anyone can retire there unless they bought a property a while ago. Rents are crazy too.

 

[CraigM]

If anything in much of California Zillow rates are probably lower than what you can get. My brother just sold his house and he got over the Zillow values. And not by a little. By quite a bit. I don't know if that is the norm. The estimates on all of these websites are all around the same now. Redfin, Zillow, Realtor.

I was really surprised after visiting Newport earlier this year, we went past an open house that was 3-4 blocks from the beach but a tiny lot and an old, depressing rental structure. Listed at $3.1M.

 

[Betsy Ross]

I was really surprised after visiting Newport earlier this year, we went past an open house that was 3-4 blocks from the beach but a tiny lot and an old, depressing rental structure. Listed at $3.1M.

Yes that entire area down from where my sister lives in Santa Barbara down to San Diego is all very beautiful. If money was no object I would live there but I couldn't afford it. I love visiting my sister but I don't see any of the bills.

 

[Wally]

I was really surprised after visiting Newport earlier this year, we went past an open house that was 3-4 blocks from the beach but a tiny lot and an old, depressing rental structure. Listed at $3.1M.

@CraigM that was probably just the price for the land! Anything near the beach has whacko prices. I have college friends that live in nothing special houses or townhouses near the beach and I am flabbergasted to see on Zillow what their places are worth now. They bought them 30 years ago. It might be expensive in California but anyone that bought here a while back and still holding is like holding a winning lotto ticket.

 

[James Bond]

Interesting, I guess it's all a matter of perspective. I was there just a couple of months ago and found everything to be super cheap. People told us it had gone up a lot from two years ago, but still everything we did in BA cost maybe a third of what it would in the US. Ubers were so cheap we basically tipped the same amount as the ride.

If you live a good life in the US, I would say inflation the past year has been 10% or higher. Every major expense for us was up at least 7%, insurance being the steepest. But if you're a civic employee for example with free healthcare, fixed mortgage, kids at public school etc you might think it's closer to 3-4%. Groceries and car insurance are up a lot but apartment rents and gas prices have fallen at least as much.

Sounds like you are comparing prices to expensive places in the USA. Prices are expensive in BA. Even since you probably left @CraigM prices keep going up. My mates there living in BA send me prices all the time and some restaurants in the same week are jumping up 10% from one week to the other. Prices in both pesos and dollars going up. This is not sustainable. The same thing happened in 2018 with Macri. You can't have prices this expensive in dollars.

Look at prices here in Malaga and food is very affordable. Prices there in BA are more than European prices. USA sounds out of control but I would bet that many placers in BA are close to American prices.

https://twitter.com/x/status/1850914578185499114

 

[Digital Nomad]

Sounds like you are comparing prices to expensive places in the USA. Prices are expensive in BA. Even since you probably left @CraigM prices keep going up. My mates there living in BA send me prices all the time and some restaurants in the same week are jumping up 10% from one week to the other. Prices in both pesos and dollars going up. This is not sustainable. The same thing happened in 2018 with Macri. You can't have prices this expensive in dollars.

Look at prices here in Malaga and food is very affordable. Prices there in BA are more than European prices. USA sounds out of control but I would bet that many placers in BA are close to American prices.

https://twitter.com/x/status/1850914578185499114

Spain is great value. It has some of the best food in the world and you can eat amazing food for not a lot of money. Supermarkets were also very affordable on my trips there. I do see prices going up here in restaurants. At the grocery stores it seems like it is not going up as fast but restaurants are not cheap anymore.

Most of the expats are also complaining about prices on almost everything except beef.

https://twitter.com/x/status/1851280176954687694

 

[Uncle Wong]

I have read a bunch of posts on X from locals complaining about carry trade. It sounds like Argentina has done that before and never worked. I wonder how this carry trade works and what the risks are?

 

[Finance Prof]

I have read a bunch of posts on X from locals complaining about carry trade. It sounds like Argentina has done that before and never worked. I wonder how this carry trade works and what the risks are?

Carry trade definitely is an issue. @Uncle Wong you can read a bit about it below. Right now dollars are still coming in from the blanqueo but that will end in a few days for most of the money. People can still bring it in until the end of the year paying a % penalty so most that wanted to bring it in probably have. Once people exit from this it will be a race to the exits and like musical chairs.


The "bicicleta financiera," also known as "carry trade" in English, is a financial investment strategy that aims to profit from the interest rate differentials between different currencies. Here's how it works:

Mechanism​

1. Borrowing: The investor obtains a loan in a currency with a low interest rate.
2. Currency conversion: The borrowed capital is then converted into another currency, typically one offering higher interest rates.
3. Investment: The converted money is invested in assets denominated in the second currency, seeking a higher yield.
4. Profit: The investor aims to profit from the difference between the interest rate of the loan and the return on the investment.

Example​

Let's say an investor:

1. Borrows $20,000 at an annual interest rate of 1%.
2. Converts the dollars to pesos at an exchange rate of 2.5 pesos per dollar, obtaining 50,000 pesos.
3. Invests the 50,000 pesos in a bond yielding 10% annually.

Risks​

The carry trade strategy involves several significant risks:

1. Exchange rate risk: Fluctuations in the exchange rate can erode or eliminate expected profits.
2. Interest rate risk: An increase in the interest rates of the borrowed currency can reduce profitability.
3. Liquidity risk: There may be difficulties in liquidating investments or obtaining financing to repay the loan.
4. Regulatory risk: Governments may implement measures to limit these speculative practices.

Context in Argentina​

The "bicicleta financiera" has been a recurring practice in Argentina:

1. It was common during the dictatorship in the 1970s.
2. It resurfaced in 2016 during Mauricio Macri's government.
3. It has gained relevance again under Javier Milei's administration.

In the current Argentine context, conditions favoring this practice include:

• A controlled depreciation of the peso (2% monthly).
• High interest rates in pesos (4-5% monthly).
• Exchange controls ("cepo").
• A capital amnesty program.

It's important to note that while it can generate significant short-term gains, the "bicicleta financiera" is considered a high-risk speculative practice that can have negative consequences for both the economy and individual investors.

 

[CraigM]

Sounds like you are comparing prices to expensive places in the USA. Prices are expensive in BA. Even since you probably left @CraigM prices keep going up. My mates there living in BA send me prices all the time and some restaurants in the same week are jumping up 10% from one week to the other. Prices in both pesos and dollars going up. This is not sustainable. The same thing happened in 2018 with Macri. You can't have prices this expensive in dollars.

Look at prices here in Malaga and food is very affordable. Prices there in BA are more than European prices. USA sounds out of control but I would bet that many placers in BA are close to American prices.

https://twitter.com/x/status/1850914578185499114

Quite possibly, most of our meals were at steak/Italian places in Palermo and Recoleta (largely recommendations here which were excellent) so I couldn't say what it's like elsewhere. I just notice the blue dollar has fallen since our visit so that would account for some US$ price inflation but it's still a long way from the 2-4x we experienced. The only place that charged US prices was Don Julio but it always looked half empty, just no vibe whatsoever and we weren't even tempted to try it.

US is really expensive, it doesn't matter where or what you eat. Labor has been a huge issue since Covid, so much bad government policy and regulation and their response has been to double down instead of sorting out the problem.

 

[Finance Prof]

Quite possibly, most of our meals were at steak/Italian places in Palermo and Recoleta (largely recommendations here which were excellent) so I couldn't say what it's like elsewhere. I just notice the blue dollar has fallen since our visit so that would account for some US$ price inflation but it's still a long way from the 2-4x we experienced. The only place that charged US prices was Don Julio but it always looked half empty, just no vibe whatsoever and we weren't even tempted to try it.

US is really expensive, it doesn't matter where or what you eat. Labor has been a huge issue since Covid, so much bad government policy and regulation and their response has been to double down instead of sorting out the problem.

Yes the blue dollar has fallen plus places are raising their prices so a double whammy lately. Don Julio used to be very busy but lately they even have had to have discounts. It's not as busy as before.

The US is still much higher. No doubt about that. It's just sticker shock to have prices go up so much.

 

[Larry]

Yes the blue dollar has fallen plus places are raising their prices so a double whammy lately. Don Julio used to be very busy but lately they even have had to have discounts. It's not as busy as before.

The US is still much higher. No doubt about that. It's just sticker shock to have prices go up so much.

Restaurant inflation has been bad. Some places I have been have gone up 12% just from last week.

 

[CecilM]

Argentina is no longer a profitable country. The dollar has dropped again, and although they insist that food prices have decreased, it’s not noticeable in people’s day-to-day lives. This is one of the countries with the highest cost of living in Latin America.

El costo de vida más caro de toda Latinoamérica | Por la inflación y el retraso del salario mínimo y cambiario desde diciembre

Un estudio de la UBA revela que Argentina es el país más caro de la región, midiendo los costos de una canasta básica en términos de salarios mínimos necesarios para pagarla

www.pagina12.com.ar

 

[Ron]

Well, get ready, because private schools will be raising their prices too.

Los colegios privados bonaerenses volverán a aumentar en el último bimestre del año: cómo quedan las cuotas

Las instituciones escolares con subvención estatal de gestión privada tendrán una actualización en sus cuotas en noviembre y diciembre

www.infobae.com

 

[Betsy Ross]

Restaurant inflation has been bad. Some places I have been have gone up 12% just from last week.

I have noticed the same thing Larry. My guess is eventually there will be a devaluation and inflation will probably jump up more. It looks like that is already being factored in maybe because prices are jumping up lately on everything. More than what the government is saying. Healthcare, tuition, expensas, utility bills. It's going up more than what they are saying.

 

[terry55]

It would be great if inflation were controlled and if unions and the government could agree on negotiating an increase in the minimum wage. We also need policies that genuinely help people and a more competitive labor market. If civil society gets involved and there’s a bit of political stability, we could see positive changes. That would be a big step toward improving many lives! However, I believe there’s still a long way to go.

https://twitter.com/x/status/1851938161842143554

 

[timoty]

More price increases, unfortunately, these hikes are unavoidable, and even if we question them, we still have to pay. It’s exhausting that everything goes up in price every month.

Taxis​

This Friday, November 1, taxi fares will rise in the Autonomous City of Buenos Aires (CABA). The increase will be 50%. With this increase, the tariff adjustment scheme planned for the second half of the year will conclude.


In this way, the value of the daytime token will go from $128 to $192 , while the night rate will increase from $154 to $230 .

The flag drop , which is equivalent to the cost of ten tokens, will also increase. During the day, the value will rise from $1,280 to $1,920 , and at night it will increase from $1,540 to $2,300 .

In addition, the tariff scheme establishes that the cost for every two hundred meters traveled and the surcharge for each minute of waiting will be equal to the value of a token, that is, $192 starting in November .

The decision to update the rates was approved in July by the City Government, considering an “ outdated daytime and nighttime rates ” due to the increase in the costs of inputs and operation.

Water​

Water and sewage services will also increase next week. The price increase will be 4% in the Metropolitan Area of Buenos Aires (AMBA) by Agua y Saneamientos Argentinos (AySA). In October, the service had increased by 5%.

For users considered within the High Zonal Level (20% of the total) the average rate from November will be $25,238 , an increase of 31% since the application of the new calculation system last April.

Regarding users in the Medium Zonal Level (37% of the total), the average to pay will be $22,920 and those integrated into the Low Zonal Level (44% of the total), the average rate will reach $18,417.

Fuels​

Following a 1% price drop this month, fuel prices will rise again in November.

The exact percentage increase for gasoline and diesel at the point of sale is not yet known. The sector expects a margin of between 4% and 9%.

In September, stations sold 11% less year-on-year, comparing the sale of 1,313,875 m3 of gasoline and diesel throughout the country, compared to 1,489,197 m3 sold in the same month last year, according to data published by the National Energy Secretariat.

Rentals​

For those tenants whose contract is bound by the terms and conditions of the repealed Rental Law , they will have to face an annual update in November of around 227%, according to the Rental Contracts Index (ICL).

When these contracts end, the indicator and frequency for updating the rental amount will be left to negotiation between the parties.

Health insurance​

For November, the private healthcare sector's increases range between 3.9% and 6.9%. If this were the case, they would exceed the inflation for September (3.5%) and the one estimated for October. Some consultancies project it to be just below 3%, such as Eco Go, by Marina Dal Poggetto, which is betting on 2.8%.

Electricity rates in the Province of Buenos Aires​

The government of the province of Buenos Aires approved a new increase in the electricity rate, which responds to the adjustment in the Power Reference Prices (POTREF) and the Stabilized Energy Price (PEE), determined by the national Energy Secretariat .

This increase will be 8% , as stated in Resolution 1156/2024 of the Provincial Official Gazette . It will apply to October consumption, impacting the bills that users will receive at the beginning of November .

Los aumentos que llegan en noviembre: transporte, agua, prepagas y alquileres

Perfilando el cierre de 2024, continúan los aumentos en servicios tarifarios, transporte, prepagas y alquiler. El detalle de las subas que se vienen próximamente.

www.ambito.com