Newcomer Who buys up all these expensive properties?

[earlyretirement]

I bought an existing property. It was amazingly easy.

I don't think anyone is saying how easy or difficult it is to purchase. I think some are saying prices now are relatively high.

 

[PhelipCer]

I don't think anyone is saying how easy or difficult it is to purchase. I think some are saying prices now are relatively high.

I certainly would not buy now as the market is on a slippery slope. Rent a property for a year and see what pans out if the economy improves (a miracle) then buy.

 

[earlyretirement]

I certainly would not buy now as the market is on a slippery slope. Rent a property for a year and see what pans out if the economy improves (a miracle) then buy.

Yes.. I'd agree with that advice. My friends that want a place in Buenos Aires, I tell them there is NO hurry to buy now. Prices certainly aren't going to go higher in the short-term. The only friends buying are people that are wealthy and buying in buildings that have units that rarely come on the market so when one comes available they are buying now which I can't fault them for.

But as I always point out to people no matter where in the world you go. Real estate prices don't go up in severe recessions. The thing you have to ask yourself is what is going to happen in Argentina that is going to cause the economy to drastically improve in the short-term? I can't think of much. The IMF emergency loan is a bandage. And even that will take you into the end of 2019/beginning of 2020. Then what?

Argentina will always have these bouts of crises because systemically the country is broken. And without a complete overhaul of their tax code, labor laws, and fiscal spending and social policies I'm not sure there is any hope of long term systemic change. So the best you can do as an investor is make sure you have cash during the crashes and pick up assets when they are lower. It's a really horrible situation for the locals but for investors it's the time to actually make money.

The best that a local can do long-term is have a paid off place that they own free and clear, watch their spending, and save up as much as you can and be prepared for these continual crises periods that will keep happening.

 

[Azteca]

I don't think anyone is saying how easy or difficult it is to purchase. I think some are saying prices now are relatively high.

The prices are high for peso earners I agree. But I came with dollars. And there is no city in the United States I could have bought a nice one bedroom apartment for the price I paid here. I know it is all relative. I moved here from Arizona, a state that is being flooded with people from California. You can sell your tiny house in California and buy a mansion in Arizona.

 

[earlyretirement]

The prices are high for peso earners I agree. But I came with dollars. And there is no city in the United States I could have bought a nice one bedroom apartment for the price I paid here. I know it is all relative. I moved here from Arizona, a state that is being flooded with people from California. You can sell your tiny house in California and buy a mansion in Arizona.

Exactly Aztantogirl. It's all relative. What's expensive to one person is cheap to another. What you mentioned is what I was alluding to. Prices are very high in the USA right now. You could pick up properties cheap previously in almost all of Arizona. It was really really cheap in 2011/2012 there. Even 2013 was reasonable. But then you had people from California moving but also you have a lot of companies leaving other states to move to be based in AZ and those relatively high paying jobs is pushing people to buy and it put pressure on prices so they kept going up. Now prices there are over priced. But at least there is a correlation to what people earn locally vs. real estate prices.

People that don't know Buenos Aires well don't realize it's another universe. It's NOT tied for the most part to what locals make. The truth is locals would never be able to purchase based solely on their salaries. It's another universe there that you have to tie together and remember all the bizarro factors that go on in Argentina.

Things like NO functional banking system, NO trust or faith in their own currency, NO trust or faith in the political system, NO trust or faith in the tax system. NO trust or faith in ANY other investment in Argentina. NO other investment that will give them a relatively guaranteed ROI and cashflow and is fairly stable if they plan to hold for the long term that also has really strong individual property rights, 0% capital gains tax as long as they purchased as an individual. You gotta understand all the dynamics of what is going on in that whacky country.

The alternative for a lot of people is to literally put their cash under the mattress or in a safe at home which has big inherent risks. They previously hid their cash offshore outside of Argentina but that is not so easy these days. So many wealthy people just put properties into family members names. I know several wealthy friends that have properties in the names of their kids, their siblings, their parents, etc.

 

[RinderHerts]

The considerations for purchasing a property in Buenos Aires vary based on whether it's intended as a permanent residence, a part-time home, or an investment for renting out. Drawing parallels, my kids currently reside in Seattle, where one-bedroom condos in average buildings range from $400k to $800k. While Seattle lacks older buildings as charming as those in Recoleta, a two-bedroom in a similar setting would easily fetch a million. Meanwhile, New York City features studio apartments with a price tag of $750.

For individuals not earning in pesos but looking to retire or with international income, Buenos Aires offers numerous apartments in historic buildings, often half the cost of newer, poorly constructed units in many U.S. cities. If you're an upper-middle-class Argentine with a stable income, acquiring a $300k USD, 100-year-old apartment in a prime neighborhood, as recently observed in my building, makes sense. These buyers, whether local or international, have a long-term perspective, prioritizing quality units in top locations. Their focus extends beyond short-term fluctuations (3-5 years) in price, emphasizing the enduring appreciation of properties with unique features like 100-year-old tile, hardwood, stained glass, marble, intricate plaster molding, and lofty ceilings of 4-5 meters. The allure of such timeless elements prevails over the newer, often subpar constructions, even with added amenities like pools, particularly in prime locations like Puerto Madero.

 

[earlyretirement]

Yep. My friends that recently bought are from NYC. And they bought in a gorgeous 80 year old French style building and they bought to retire in. So as you mentioned it’s all relative.

I own several properties in Buenos Aires and will hold them for the long term. I didn’t buy them to flip. Although they have appreciated tremendously over the years, I don’t need to sell them and I already own many properties around the world that I also bought for the long term.

I love investing in real estate more than any other asset class or investments. A great property in a great neighborhood long term will always do well. I plan on passing on all the real estate to my kids someday which is pretty much what the locals also do that own a lot of real estate.

All of my wealthy friends in Argentina have a buy and hold strategy and they all own multiple properties in BA.