The Gods...they must be crazy

Remember that movie?  Maybe not.  Well here, the investors are like Gods.  Argentina went for too long without foreign investment.  Then all of a sudden Argentina was hot.  Every time you pick up some travel piece they are talking about Buenos AIres as the new hip happening place, and it's cheap too.

OK, fine.  That will pass.  People will get tired of the dog doo doo on the sidewalks, black exhaust pouring out of noisy buses, and their inability to be understood if they don't speak Spanish.  What will not pass is the plethora of tower apartments destroying the barrios.

In a 2 block radius in any direction from my apartment they are building ugly tower apartments.  To the right are twin towers on Paraguay.  Around the corner is another tower.  To the left a block down another new tower is being planned, a block over on Oro is another, on Uriarte a 35 story ugly monstrosity just keeps getting taller and uglier each day.  On Thames, they just destroyed an incredible stone building.  The inside and outside was impeccable.  I watched them demolish beautiful hardwood, marble, and intricate moldings - to make way for another ugly modern tower.

On Thames was a store that used to house a ceramic seconds business.  That was kicked out. They are building 5 floors on top of the original store which will have 10 apartments.  The problem here is that sewer lines, electrical lines, gas lines, and water, were all meant for a single unit.  Now 10 units need to share those single lines.  (Bet you would just love to buy one of those!!)

In addition to the towers, there are the regular sized apartments.  They are multiplying like rabbits.  Every time you turn around a new building is going up with 16 - 25 units.  They brag about solariums,  laundry, cable for Internet, and lots of other extras. 

A restaurant was destroyed to make room for a new Apart Hotel for tourists.  1 building - a restaurant. Now to share all the same utility lines but among how many rooms?  Kind of scary if you ask me.

Now, all of this might be OK if they were building for some kind of phenomenal demand.  If people were clawing at each other to buy a coveted apartment.  The sad part is they are not.  The tower apartments are priced so high (and for poor construction) that the average Argentine would never buy one even if they could afford it.  Prices of $70,000 for a studio on the 1st, 2nd, or 3rd floor and the prices get higher as the units get larger or are on higher floors.  They aren't cheap.....and they aren't selling.

The building that opened a year ago on Thames is still half empty.  The sign proclaiming "last units available" has been propped up against the fence since the day they opened the doors.  Those apartments cost less than the new units going up.  Who is going to buy those?  Or the ones in Belgrano? Or Caballito? Puerto Madera? And everywhere else in the city.

The apartment building behind me converted to a boutique hotel.  The ones down the block now have a big sign enticing buyers to purchase to rent to foreigners.  There are tons of signs on apartments "For Rent" and many more "For Sale".  No one wants to live near these towers, many people are unable to rent their apartments.

Yet, they just keep building like people are rioting to buy.  What are they thinking?  Walk through the neigborhood.  You have to start thinking differently.  That is the business analyst in me.  I saw the mortgage crisis in the U.S.  It just happened a little later than I expected.  I have always been paid to find problems.  I see lots of problems.

Businesses that have been established, that were here during the crisis are now going out of business. Their rents were raised and they could not afford to move.  A couple of years ago when a business vacated its storefront it was go to another that was bigger and better located.  Within days another business moved in.  That is not happening anymore.  The storefronts are staying empty.  Maybe not in the heart of Palermo, Recoleta, and Belgrano, but everywhere else I see it.

Last Saturday when we taxied back from the milonga Sandra and I were shocked at how many empty storefronts there were on Scalabrini.  This morning walking Roxie I counted several on Thames, and this is Palermo.  Not a good sign.

Our new president-elect, Christina, must be crazy - Goddess or not.  She will be inheriting a country with high inflation and a crumbling infrastructure.  There new construction has put a major strain on electricity, gas, and water.  No one is buying....yet....they continue to build.  Those Gods, must be crazy.

Comments

[Samuel]

Nice article and it is always sad to see beautiful structures torn down in the name of progress. In my neighborhood there have been a couple of new apartment building opened in the past year and about a dozen construction projects in about a four block radius. I attribute much of the construction here to the booming tourism industry. In 2007 estimates sit at around 4 million visitors to Argentina and by 2010 they are expecting more than 10 million visitors.

Another thing that really gets me is that they are systematically fencing in all the parks in town which is in some cases destroying the visual aesthetics. Statues, fountains, gardens now have much of the view now obstructed by ugly wrough iron fences.

[jamie]

Here in Bariloche there is some new building, but still lots of great deals on older properties. I don't think we are experiencing the same trends as BA. There are not a lot of vacant storefronts, that is for sure.