mandag, mars 31, 2008

Cash is king


Bring cash. Argentinian confidence in banks rival their lack of faith in the military, police and politicians. All for quite understandable historical reasons of course, having banks literally steal your account does not make for credibility.

Renting apartments for example, is done with cash. Stranger still is the fact that cash is also used for buying apartments. While the process of buying a house can be nerve-wracking enough in Europe or the US (especially these days), imagine the added stress of carrying around a briefcase of 100k+ USD on the streets of Buenos Aires. The atmosphere is pretty tense with buyer and seller sitting around a table counting a wad of notes before the final signatures can be made.

Buildings are popping up all over there place, especially in the trendy bubble of Palermo as in the picture. Prices have been rising phenomenally, but there is a limit to how much influence foreign capital can have. At the moment the costs of apartments are very much out of whack with the general Argentinian economy. So even though prices are still stupidly cheap from a European viewpoint, it is buyer beware, given the extremely cyclical nature of the Argentinian economy. The next crash could see prices dropping 20-40% and with the current centre-periphery conflict the situation is dicey. Rent, with cash.

5 kommentarer:

Hansson sa...

Stilig post - verkar som du har god innsikt. Tenkjer du på å kjøpa? Neste vinter er eg på tur med kontoret på ryggen, viss du er i BA då tar eg turen!

TrUlster sa...

Per nå er kjøp ikke tingen! Ta definitivt en tur neste vinter, det vil du ikke angre på. Nåværende plan er verden-rundt billett som ender opp her igjen i okt-nov for lang tid.

Perpetual_Traveller sa...

Very solid advice.

I always like to keep an eye on property prices/rents here. Most of the time I find myself wondering how the hell your typical Argy can afford to live here.

Short-term rents have boomed over the past 2 years, almost 50% up in many cases (seasonal too obv).

Anonym sa...

I was sending you an email, hope that you will answer me. It's about the football here on Iceland, I did talked to you about last summer.
My email is bucum8@hotmail.com

Thank you.

Traveling Girl sa...

Hello Trulster! Thanks for your visit.

Interesting posts here, I'll have a look.

Where are you from? And what are you doing in SP?

:)