The new apartment is an investment. Before we retired in early 2008, we'd made certain assumptions about the income that our savings would generate. That was then . . . we've spent the last several months revising those estimates and trying to figure out how to preserve principal and earn more than 1.35%.
Argentine real estate has consistently held its value, in large part because mortgages are not easy to come by and have more stringent terms. Purchases generally are cash transactions. Speculative bubbles, like the one that most recently blew up in the US and elsewhere, are nonexistent.
Tourism from the US, meanwhile, is on the rise here, as exchange rates continue to make Europe too expensive for many Americans. So we've dipped our toes into the vacation-rental business, buying a new apartment in an old Belle Epoque building that has been completely refurbished and retrofitted over the last 3 years. The photo here shows it off nicely!
UPDATE 2011: We have sold the apartment.