MercoPress. South Atlantic News Agency
Construction in Argentina down 6% in March; industry demands price stability
Argentina's National Statistics Bureau, Indec revealed that construction activity fell 6% in March compared with the same period in 2013. The Argentine government, as has happened with the poverty figures, at first was reluctant to release the index, but finally delivered the latest data. Read full article
Comments
Disclaimer & comment rulesA downturn in construction is a very clear sign that the economy is tanking.
May 03rd, 2014 - 07:02 am - Link - Report abuse 0The Argentine governments political ideology can't ignore the rules of commerce, industry, economics and just plain common sense.
I wonder why it is so difficult for this Argentine government to understand why the world's economy is the way it is. It has evolved to it's current status because it is the only way it can work.
If there truly were a different and better way of doing things then that is what would be being used today.
Political ideology refuses to accept the truth and tries to enforce a flawed system onto the people. But this will always fail.
Look at the USSR. It collapsed because it's political ideology couldn't cope with market forces.
Look at Venezuela. It is currently imploding because it's political ideology cannot cope with market forces.
Look at Argentina. It is beginning to implode because it's political ideally cannot cope with market forces.
Thanks Leprecon, i love your optimism and support to us.
May 03rd, 2014 - 05:34 pm - Link - Report abuse 0Market forces, capitalism has failed everywhere it's been tried.
May 03rd, 2014 - 05:55 pm - Link - Report abuse 0It was MERCANTILISM that brought prosperity to a BROAD sector of the population, see:
The Venetian Republic
The Hanseatic League
Capitalism creates wealth but distributes it inefficiently, shutting down competitors by restricting credit at the first sign of decreased profits, and amassing all wealth into the top dog of the industry (creating a monopoly). Capitalism inevitably leads to cronyism and a Plutocracy, as we see in China, Brazil, Russia, and the United States, where the rich create laws to further the cycle of wealth flow to them.
Mercantilism distributes wealth based on efficiency, innovation, but also allows others to participate. Because it is efficient, countries that have applied mercantilism have been some of the most democratic, with the most citizen participation in history in making law (again see Hanseatic League and Venetian republic). They also, by fact of a good distribution of wealth, allowed arts and music to flourish, and both towns and cities were vibrant and prosperous with NO poverty quarters. In capitalist cities you have mega-wealth next to (or above) pockets of abject poverty and exclusion.
Mercantilism was one of the reasons that motivated the collapse of the Spanish and French Colonial Empires.
May 03rd, 2014 - 06:05 pm - Link - Report abuse 03. I've said it many times, your education is an embarrassment.
May 03rd, 2014 - 06:15 pm - Link - Report abuse 0Bearing in mind that Silk, Species and Salt and Honey were the most precious commodities in the middle ages I would assume that the people who controled the trade and routes in the Medditeranean and the Baltic Sea to Central Europe respectively would have being very rich indeed.
May 03rd, 2014 - 06:27 pm - Link - Report abuse 0Venice was a Naval power house of Europe for centuries up until the Turks came to power.
@5
May 03rd, 2014 - 06:31 pm - Link - Report abuse 0How would you know what education is, as an American.
Why don't you ask the World's Royals and Billionaires where they send their kids to school.
May 03rd, 2014 - 06:42 pm - Link - Report abuse 0Even your revolting Prez sent her drug addled daughter here.
It certainly isn't UBA, where they can't even fix the roof or provide toilet paper in the loo.
They do say, invest in bricks and mortar and you cant go wrong,
May 03rd, 2014 - 08:26 pm - Link - Report abuse 0interestingly in Argentines case, investing in leggo bricks just don't have the same clunk ..lol
of course construction, along with other industrial activities has been deeply affected by the policies of these useless ministers / officers / politicians.
May 03rd, 2014 - 10:29 pm - Link - Report abuse 0the final blow was the last devaluation, the exchange rate policy, etc.
anyway, there is still a good number of buildings to be finished, and luckily those constructions were not aborted, like in 2001.
the sale expectancy is less than zero, but methinks it still is a good investment, considering the cost of the square meter in dollars.
@7 Horse shit_shall_B_spewed
May 03rd, 2014 - 10:57 pm - Link - Report abuse 0“How would you know what education is, as an American.”
If you could send your children to any university in the world, in which country would that university be? Russia? China? Spain?
Would you send them to an Argentine university?
“Would you send them to an Argentine university?”
May 03rd, 2014 - 11:05 pm - Link - Report abuse 0of course not
everybody would send them to the port stanley university.
or is it falkland islands university?
Real Estate in Argentina is a horrible investment. Priced in dollars and rented in Pesos.
May 03rd, 2014 - 11:12 pm - Link - Report abuse 0You are much better off trying to get the money out and put in a country that respects private property rights.
If you think its bad now wait until the next devaluation! Its gonna be even worse.
13
May 04th, 2014 - 01:16 am - Link - Report abuse 0no
not all the properties are rented in pesos.
aa and aaa offices, and housings located in the north corridor are rented in dollars.
but the good deal until last january was to buy / invest in real estate through fideicomisos.
so you had a cuota in pesos during 1 1/2 or 2 years, the period of construction, and you obtained an apartment quoted in dollars, mostly in palermo, colegiales, belgrano, olivos, san isidro, etc.
@13
May 04th, 2014 - 06:39 am - Link - Report abuse 0Here is a good investment
http://www.thenation.com/article/173120/how-private-prisons-game-immigration-system#
What a horrible, appalling place that country in southern North America.
port stanley university
May 04th, 2014 - 09:33 am - Link - Report abuse 0The future envy of south America perhaps ?
14. If there were good investments available in Argentina you'd have FDI. Take out the U$ that the companies are forced to keep in the country instea of repatriating it and there is practically none.
May 04th, 2014 - 04:36 pm - Link - Report abuse 0It may even be negative with all the U$ flying out of the country still.
Toby I agree Mexico is awful, not as bad as Argentina but still awful.
17
May 04th, 2014 - 05:39 pm - Link - Report abuse 0well, it was a relative good investment during the cepo cambiario, from nov 2011 to dec 2013.
after last january, conditions changed again, and everything froze.
anyway, it was directed mostly to small investors, that is where the fideicomisos are focused.
Construction and cars have never being good investments although a lot of people have turned them in the past when they have been denied US dollars.
May 04th, 2014 - 06:47 pm - Link - Report abuse 0Argentina is the only country in the world that thinks buying refrigerators, washing machines and TVs is an investment.
May 04th, 2014 - 07:00 pm - Link - Report abuse 0@20
May 04th, 2014 - 07:08 pm - Link - Report abuse 0I know... And where and in what would you invest in Argentina if you could NOT buy US dollars nor take your money abroad. Maybe not even invest simply protect your property and money against inflation and devaluation?
21. I would be very depressed if I lived there. Unless you are super wealthy your family is doomed to a gradual decline into poverty spending capital that should be invested to just make ends meet.
May 04th, 2014 - 07:15 pm - Link - Report abuse 0Every generation sells the family jewels just to survive.
What you know or think about luxury, furniture and antiques markets ?? Gold, Silver?? Border countries currency ??
May 04th, 2014 - 07:53 pm - Link - Report abuse 0The overall problem with buying anything in Argentina is that most of it is pretty expensive compared to similar items in the USA. When I first moved there I was able to buy some good quality art and antiques but that's when people were desperate and before Mercadolibre and Ebay so they really didn't know the value.
May 04th, 2014 - 08:02 pm - Link - Report abuse 0Antique furniture is still a good buy in Argentina but not once you pay for shipping and taxes to get it back to the USA.
By the time you pay for everything its cheaper just to get it here.
I thought you couldn't really get precious metals in Argentina?
Border currencies, hmm, the Rial is shot Brazil is going into recession and will depreciate it, Uruguay will be hit hard with both Arg and Brazil in recession, Chile may be okay, Bolivia no, Paraguay maybe.
Your best bet is to buy U$ on the blackmarket and pay the premium. It won't look like a premium in a few years.
Yes US dollar in the blackmarket always is on the menu and what everybody ends up doing, thanks for your review.
May 04th, 2014 - 09:18 pm - Link - Report abuse 0Its not fair that not only the Peronist State that is faulty of creating these situations each 10 to 15 years also penalizes and punishes those trying to just defend themselves of the problems they create.
I had read recently somewhere around that border currecy might be a good business but it was very high risk. But now I cant find the link.
A well known economist Tomas Bulat admitted that he had purchased Peruvian soles some years ago and made a very good difference
Peru is doing well but I know a lot of wealthy Peruvians (I have no idea why I know so many) and they keep their money in u$ in the USA.
May 04th, 2014 - 10:09 pm - Link - Report abuse 0So who knows?
Currency trading is super risky and I think rigged by those in the know.
I wouldn't try it.
Depending on how much $ you have I've always liked Montevideo. Someday they'll clean it up and it will be a nice little town. Definitely a long term hold. PDE is way overvalued with all the unwashed/drug money. I wouldn't buy there.
construction was never a good investment in argentina?
May 05th, 2014 - 12:17 am - Link - Report abuse 0funny.
tell that to consultatio, irsa, caepsa, eidico, etc
27
May 05th, 2014 - 12:58 am - Link - Report abuse 0As a INVESTMENT its not clearly not, thats why all the owners are bitching because they are increasing rents below inflation rates. It's that they have too. The tennants just cant keep up. And I myself Im see at night many brand new towers and high buildings empty with no lights... You just name the main real estates and builders that are top brands in the country, it still doesn't make it a good investment per sè
3 Nostril-MendocinoVino
May 05th, 2014 - 05:55 am - Link - Report abuse 0“Mercantilism distributes wealth based on efficiency, innovation, but also allows others to participate. ”
Sorry Nostril-Mendo,
that doesn't sound quite right.
High tariffs and Protectionism leads directly to inefficiency and stunts competitiveness, the opposite to development and innovation.
Governmental regulation of trade and money supply leads directly to cronyism and corruption, NOT even distribution of wealth or democracy.
“Mercantilism is an economic theory and practice common in Europe from the 16th to the 18th century that promoted governmental regulation of a nation’s economy for the purpose of augmenting state power at the expense of rival national powers. It was the economic counterpart of political absolutism.[1] It includes a national economic policy aimed at accumulating monetary reserves through a positive balance of trade, especially of finished goods. Mercantilism dominated Western European economic policy and discourse from the 16th to late-18th centuries.[2] Mercantilism was a cause of frequent European wars and also motivated colonial expansion. Mercantilist theory varied in sophistication from one writer to another and evolved over time. High tariffs, especially on manufactured goods, are an almost universal feature of mercantilist policy. ”
http://en.m.wikipedia.org/wiki/Mercantilism
3 The_Truth_shall_B_Trolld........
May 05th, 2014 - 10:45 am - Link - Report abuse 0You should get off the pipe, it's damaging your brain.
28
May 05th, 2014 - 11:01 am - Link - Report abuse 0first you said that construction (and cars) have NEVER been a good investment here.
now you refer to the current moment.
clearly construction was one of the best during almost 10 years.
if the developer was hope funds or a group of little investors gathered in a fideicomiso, that did not change too much the results .
agree about cars, unlike real estate, they are not a capital good.
31. Your posts are not very clearly written. It seems you may be confusing investment with business.
May 05th, 2014 - 12:02 pm - Link - Report abuse 0Construction (business) was probably good over the last decade, Real Estate ( investment) is not so good. Prices are declining and so are rents.
Real estate prices have always been skewed up because there is no where else to put your savings. There is no economic reason that there are places in BA that are more expensive than a US city. The people I rented my BA apt from paid 750K in the 90s for it and when I rented it I offered them 250K for it. If I remember correctly I only paid U$1500/mo for it. Which is a horrible return on 750K, I am not sure that even covered their taxes and condo fee. They were happy though I think my rent saved them from bankruptcy.
29
May 05th, 2014 - 01:37 pm - Link - Report abuse 0Actually Venice controlling what was most of the Medditerranean sea shipping lanes, trade and ports and the Henseatic League in the Baltic Sea & North Sea, they were fairly free trade areas of the time considering that this was the middle ages. Toby has taken out of context trading zones and monopolies with systems that came about later in history to show his case.
The Venicians traded spices and silk that had come all the way from China and India in Europe as they had control of Middleastern ports and enclaves so they were kind of a monopoly in a sence. Thats perhaps why he confuses this with Mercantilism (?)
Another trade hub was the Baltics region where all the salt and honey was produced at the time.
Those zones ware were all the money and economic activity was
32
May 05th, 2014 - 03:01 pm - Link - Report abuse 0no. i have never confused investing in construction with buying properties.
they are two total different business.
during those years, +/- 2003-2011, you had a return of +/- 30% when the building was finished, that is in +/- 1 1/2 or 2 years.
so, a developer obtained that gain with a high expectation of sale, or a small investor got an apartment for +/- 70% of its market price.
of course, all of that changed for worse with the cepo and the ultra high inflation rates.
34. You're own figures would show a loss when you account for inflation.
May 05th, 2014 - 03:20 pm - Link - Report abuse 035
May 05th, 2014 - 03:43 pm - Link - Report abuse 0that was the return in dollars.
and the anual inflation rate, when lavagna was in charge of economy, was of 4 % average.
Dollars or Pesos that's still a horrible investment return. You'd do better in the USA with pre-construction.
May 05th, 2014 - 03:57 pm - Link - Report abuse 0eh?
May 06th, 2014 - 02:11 am - Link - Report abuse 030% is (was) double of the average net profit margin for real estate development
the average in most of the countries is 15%
Hmmm bubbles are never good and I think this has being bust by inflation...
May 06th, 2014 - 04:28 am - Link - Report abuse 0I think the best thing is to have a handful of options and opportunities in which one can invest. It can’t be that the only options for investors are the US parallel dollar and investing in real estate.
Yeah the real estate business in Argentina is over for quite awhile. Falling rents and decreasing property prices will only get worse as the economy crumbles. Nobody is buying anything.
May 06th, 2014 - 11:45 am - Link - Report abuse 0I made some good money last time the economy failed since I had U$ and people were desperate.
But I think this coming problem will make 2001 look like the good ol' days.
For you sake I hope I am wrong.
Paul, Investing in Arg construction may, and I stress may be good for an Rg but not for a foreigner. Only because we have choices and you don't.
There's no financial backstop, no surety bonds, no completion bonds, investing there is too risky and as I said before IF it was a good investment you'd have FDI. You don't and I don't see that changing anytime in the medium future.
yankeeboy
May 06th, 2014 - 12:20 pm - Link - Report abuse 0again, it was a good investment for +/- 10 years.
was: past tense.
about foreign investors and that, what were george soros, gilberto sayão , etc doing here then?
parece no les fue nada mal acá.
41. Soros was probably there trying to figure out if it was worth trying to crash the peso.
May 06th, 2014 - 12:29 pm - Link - Report abuse 0But CFK was doing that job all by herself and making her own fortune.
Probably but just a guess
As they say, past performance is not an indicator of future success.
and who is talking about future success?
May 06th, 2014 - 12:47 pm - Link - Report abuse 0the situation right now is a mess.
now, there was not a bubble burst in real estate prices like in europe or the usa.
prices did not even fall down with the cepo.
the activity is frozen, the owners do not want to sell, but the few sales of obras terminadas and used properties are done in dollars and with the price of 2011-2012.
as for soros, well he did not do what he did in england
Paul, Prices are down 10% so far in 2014. Yes nobody wants to sell but sometimes you have to sell. Just give it a little more time. The unraveling is just beginning.
May 06th, 2014 - 12:55 pm - Link - Report abuse 0I didn't get my best deals until a couple years after the crash. It takes people a long time to figure out its better to take a big loss now rather than little losses every month for an indeterminate time period.
Plus banks, investors, etc can force sales.
Just wait this is just the beginning.
Think, how many generations back can you trace your ancestors in South America?
May 09th, 2014 - 09:11 pm - Link - Report abuse 0Commenting for this story is now closed.
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