Work Abroad but earn in USD

Monday, December 12, 2005

Cost of Living in Argentina

A reader recently mentioned that Argentina has experienced inflation of about 10% this year and is expected to experience further inflation of 10% during the next year. With the dollar/peso exchange rate still hovering around 3:1 , that would seemingly be a concern for anyone expected to move here. I'm going to address this issue in this post.

Reader's Comment

Since the Expatriado moved to Argentina, prices have gone up about 25% yet the dollar value has stayed the same. This means that the cost of living has gone up therefore reducing in a dramatic way the advantage of living there. Furthermore, inflation is predicted to go up another 10% or so next year, while the dollar will continue to be steady at around $3. Thus, the promise of living in a cosmopolitan area with a reduced cost of living is coming to an end. Expatriado: Do you think it still makes sense to go live there in light of these new developments?

One of the Cheapest Cities Worldwide

Mercer Human Resource Consulting, which publishes an annual list of the cost of living in cities worldwide, recently put Buenos Aires 142nd, out of 144 cities ranked. What was slightly more expensive than Buenos Aires? Bangalore, India. The only two cities that were cheaper were Manilia, Philippines and Asuncion, Paraguay.

The fact that there was high inflation this last year does not surprise me at all. The economy is on the mend. Unemployment is down. There are more pesos to be spent and more employed people to spend them. Looking at where Argentina ranks -- 142nd out of 144 cities -- there is nowhere for it to go but up. So, yes, things may start to cost more here.

However, you can still live in a cosmopolitan capital city with a very European culture, architecture, and citizenry at the price of living in Bangalore, India. In what European capital city can you buy a 1000 sq. ft. apartment in one of the nicest areas in town for just $100,000 USD? None.

Lifestyle and Culture Matter

Sure, you could go to India, the Philippines, Thailand and any number of other countries and pay about the same as in Buenos Aires. Perhaps next year Bangalore will end up being cheaper than Buenos Aires. However, you won't find anywhere else that lets you live a western lifestyle at the same price as Buenos Aires.

I've spent a few months in India and even though I was amazed at just how cheap everything was, there was a price to pay for that -- people urinating in the streets, rampant poverty, shantytowns everywhere there was an open space. It wasn't just the poverty, it was the culture also. The television programs don't show men and women kissing. When I went to a bar / dance club the men and women were not dancing together. Most of the guys my age were still virgins and didn't date because they were expecting their parents to find them a wife.

There is no way, despite the amazing cost savings from living in India, that I could ever live in a place like that with such a foreign culture. If you look at the other cities that are on the list that are near Buenos Aires -- not a single one can provide the same kind of lifestyle that Buenos Aires does.

Expect Costs to Increase

It is only natural that costs are going up in Argentina. They are just so low right now that it would be difficult for them to go any lower. Nevertheless, this place is a bargain. In 2002 there were 10,000 American expatriates who were registered with the U.S. Embassy as permanent residents here. Today that number is 35,000. My parents just bought an apartment two blocks from mine because they came here and fell in love with the city. Their downstairs neighbor is American also. One of the biggest real estate companies in the city has its hands full just dealing with expatriates who are coming here.

There's never been a better time to be in Buenos Aires and if my expenses go from $1000 USD per month to $1100 USD per month next year, so be it. It'll still be a far better and cheaper lifestyle than when I was in the U.S. Costs won't go up forever, either. They'll rise until they hit some equilibrium. If inflation really starts to get out of control, the exchange rate will rise and American expatriates who have their income in dollars will be protected.

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24 Comments:

Blogger rickulivi said...

Expatriado:
Thank you for your excellent response. The Kirchner administration should hire you as Tourism czar. Your enthusiasm would be a great plus for the country.

12/12/2005 08:41:00 PM  
Blogger johnny said...

Expatriado,

Glad to see you active with the blog and addressing everyone's questions, concerns, opinions and fears. I'll be heading to BA January 14, and I am busy selling belongings, setting up USABOX to handle my mail, downloading Skype, adding a laptop, deepsixing the desktop, etc. One thing I have yet to tackle...the cellphone issue. Any advise about picking one up upon arrival in BA ?

12/12/2005 09:46:00 PM  
Blogger michael said...

If you read online the reports of the experts of the Di Tella University Business School,-quoted frequenly in local newspapers- thay project a loss of approx. 40% of the dollar's purchasing power between now and 2015.

You have to count that
also there is a USA` inflation
of about 4% a year...which , if I uderstood correctly , needs to be detracted from the Argentinian
inflation.

Any comments?

12/25/2005 10:08:00 PM  
Blogger apartmentsba.com said...

Prices have definitely gone up and I agree they will continue to go up. If you are a local and making pesos you will really feel it but honestly, if you are making u$s dollars, UK Sterling or Euros you won't feel the pinch too much.

Yes, I am spending more as restaurant costs have gone up, taxi costs are up, etc. Still, I don't mind. It's the locals that really suffer. Salaries are going up but not at the same % as the price increases.

People need to understand something. You can spend as much or as little here as you want. You can either have a very quiet and low key and affordable life here or you can spend as much here as the USA.

I looked at my finances year end at 2005 and surprisingly on just personal expenses (NO business expenses at all). I spent as much in Argentina than I did in the USA. I mean that. Much of it was traveling around here in Argentina, Brazil and South America. Still, it's very easy to spend a lot of money here if you are going out to eat everyday, taking taxis all the time, going out at night. Going out on dates, clothes shopping each week, etc.

Still, most expats that live here and are making green backs will tell you it's a paradise here. I don't ever see myself living in the USA again.

2/12/2006 02:27:00 AM  
Anonymous Anonymous said...

I came upon this blog because I saw that Mercer global ranking. Bangladore vs. Argentina? Please. I too am looking to move overseas permanently. Some friends of mine have moved to Asia, but it's too far/too exotic for me. Thanks for the website, I'm definitely considering Argentina. I speak Spanish, so that'll help. Gracias, Comandante Expatriado!
Vic, Orlando, FL, 39.

3/28/2006 12:58:00 AM  
Anonymous Jessica said...

Wow!! I can't belive that american people come to live in Argentina...it's unbelievable...for you the cost of living is cheaper..but it's an insecure and the administratives and political institutions are badly managed...the two remarkable and best things of argentina are its landscape and its people...

Nice blog!

c u

6/14/2006 02:57:00 PM  
Anonymous Anonymous said...

Just how did all this information get out 40 years ago. Just wanted to know.... I have an income of about $2000 a month. Is it easy to live in BA on that. Also what are the cost of meds.

Mac

7/27/2006 06:53:00 PM  
Anonymous Anonymous said...

I am a 57 year old bachelor. I like dating younger women who are not expensive to keep. How friendly are the women?

7/29/2006 11:38:00 PM  
Blogger David said...

I'm considering moving to Buenos Aires. How's employement there? I'm currently in the real estate industry and have a background in international business. Also, do you have any tips about obtaining residency there?
Any help you can give me would be greatly appreciated.

d.

12/20/2006 06:44:00 PM  
Anonymous Anonymous said...

Argentina is the most Expensive Country to live in south america and the worst economy as well, only way to stay above water there is if you bring out side money as u.s dollars or euros, other wise stay away far away.

3/18/2007 12:14:00 PM  
Anonymous Anonymous said...

My wife and I are heavily considering the move to BA. My career allows me to work wherever I have a quality internet connection, capable of VOIP. Could you share any experience that you may have with this? Do you know the availability of at least DSL quality or better. Starting to get spoiled with speeds up to 6Mbps in States, but really could get by with 512Kbps-1Mbps. Thanks!

7/28/2007 07:14:00 PM  
Anonymous nonsmokinjoe said...

Interesting to compare Brazil and Argentina. Most of what you say would have applied to Brazil three years ago. The cost of living in both countries is similar. The big difference is the exchange rate. Whereas the peso has weakened further slightly against the dollar. The Brazilian real has revalued about 40%. Although inflation is lower in Brazil ( about 6% pa), this has been a big blow to expats here as things are nowhere near as cheap as they were 3 years ago. It's still a great place however and property remains and absolute snip.

11/04/2007 10:34:00 AM  
Anonymous Anonymous said...

brazilvlad,

can you guys give us examples of what living costs are please? Rent, real estate, cars, supermarket foods.
My guess is if i have R$3000 brazilian money it would be like having US$5000 in the usa for equal living lifestyle including rent charge.

2/01/2008 10:08:00 AM  
Anonymous Anonymous said...

Help me out a little. if you are an expat with a foreign income and concerned about rampant inflation, what better way to hedge the inflation than owning a property? if rents continue to increase, your cost of housing is fixed (i.e., not subject to inflation). if the exchange rate is somewhat stable with your home country (2.75 to 3.25X to the dollar as noted above) the sale price on inflated pesos will actually increase your capital when denominated in your home currency. if housing is the biggest expense (1/3 of total living ?) this should have an excellent hedge against inflation. Understood that an apartment might cost $75,000 to $200,000 and might not be affordable to everyone, but if relocating long term, this should be a conservative way to go.

3/17/2008 08:17:00 PM  
Blogger Roy said...

Dear Expatriado,

thanks so much for your helpful blog. I haven´t seen many recent posts, but I still hope it´s active.

I´m a student in Harvard college and am coming to Bs.As. for study abroad. I´d like to live in a studio appartment while studying there, but all the apts advertised on craigslist start at 600 USD. It´s very different than what I had expected; I was wondering if there is any place you´d recommend to look for an appartment.

Thanks,
roy

6/18/2008 05:36:00 PM  
Blogger gringo said...

hi I am a painter looking to move to argentina. I am wondering if and how much cheaper it would be by living in a small village an hour or so outside a larger city.. I live a hyper-simple existence, no ging out to eat no shopping, travel,.etc.. my only expense would be art supplies a occasionialy model fees (hiring someone to sit for a potrait) Woul $400.00 a month be enough? thks for any help on the mater

9/06/2008 11:46:00 PM  
Blogger MTW said...

My Argentine wife and I are thinking about moving to Argentina (Mendoza preferred). My spanish is not that good and I was wondering if anyone out there would know of some resources for a english speaking job.

12/30/2008 07:38:00 PM  
Blogger Olga Celle said...

I was reading the first two posts that opened this discussion dated 2005. I was wondering if any Expat currently living in Buenos Aires or Cordova could actualize the cost of living figures? Thanks.

1/22/2009 02:22:00 AM  
Anonymous Anonymous said...

Argentina is indeed inexpensive and has a lot of things to offer but you can't make any money there. So, unless you are retired, a student, vacationing, or an invester... stay away. If you are one of those idealists who believe you can start a business there a be successful you are in for a real surprise. There are a few people like Michael Koh who set up a real estate business there and is/was fairly successfull but he had a sound business play and probably a few million US dollars to start. Don't think you can leverage in Argentina... you can't... no loans.

6/30/2009 09:30:00 PM  
Blogger KIKO said...

Don't know what the whole fuzz is about Argentina...it is a great place, but if you are looking for retirement, low cost of living , great "medical" facilities, a way to earn a few bucks on extra time, great colleges, close by other great places and countries, no problems with english, french, spanish, and really affordable...why go thousands of miles away? I mean, if down the road you change your mind...OOPS! Try Isabela, Puerto Rico. Come and visit for a while and you will be amazed!

I did it and I am very happy, and close to home. It is the best of both worlds, away from the US, but in the US? Strange, isn't it?

Price Lists:
Lobster with plantains, salad and a drink $18-$24

Regular Coke (can) .50 to .85

Full Lunch: rice and beans, 1/4 oven roasted chicken, salad, small dessert and dring=$5.85

Supermarket prices...incredible...where do you find "Churrascos at .80 cents a pound? (on sale of course)

Milk gallon is still 3.25 in many places

gasoline 2.20 gallon !!!!!!!!

electricity .22 - .27 a kw?

Want more? Come on down and try it..

house rentals fron $300.00 and up?


Lewiz

7/26/2009 11:51:00 PM  
Blogger Ada said...

I'm born in uruguay next to argentina, and honestly I will tell you that argentina is a big country with many nice natural places and a big city with very nice old buildings and I will stop there, it can be good for americans or european people that are educated and can get good jobs and have plenty of money to live in good leafy areas of buenos aires, but if any of this 'migrants' had to work in lower paid jobs like many other argentines, the reality of 'argentine life' will hit them like a rock falling from the sky..it will be to them like working in america in a low paid job and trying to survive with it..

1/19/2010 09:02:00 AM  
Blogger Mpho said...

Im a african who knows a lot about wine and thought I should move to Mendoza for a year are there jobs there and how are argentinan's expats of african decent?

1/29/2010 03:34:00 PM  
Blogger molly pierucci said...

my husband is from argentina and we have been married for four years here in the united states. we managed to save a few thousand dollars and opened a bar in the town his family lives in, it's a suburb of rosario. the bar has been doing well for over a year now and we have regular argentine income, also, we have begun building a house. from what he tells me, owning our own house and the small income from the bar will have us living quite comfortably, and i am excited to get there in the next two months, he has been there for two... i would say from our experience, you can live very well if you own your own house and have an income of about $1500/month. hope this helps. -molly

1/30/2010 06:33:00 PM  
Anonymous Anonymous said...

well, good life depend on individual.i live in India with an average $2000 a month income. i have three cars,own 10 rooms house with 24 hours running water,can afford foreign travels once a year.so, the standard calculation is :divide by 10 to whatever cost in USA if you are living in India including hospitals bills.

6/15/2010 01:31:00 PM  

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