In October, in a context of high inflation, which accumulated 56.4% in the first eight months of the year, rents could have an increase of more than 70% per year, according to the evolution of the Lease Contracts Index (ICL), prepared by the Central Bank.
According to these calculations, the indicator already rises to 69.7% for those who have to update their lease, according to Marta Liotto, head of the Real Estate Professional Council (CPI). That is for all people who rented in October last year or October 2020 and need to update their rental values.
“We have no parameters to see if the increase of that percentage will stop or if it will go up. We believe it it can exceed 70%. It’s 70.5% in the next two weeks, underlined the directive.
The adjustment, it should be remembered, is for contracts stipulated in October 2021 or October 2020. Once a year, the adjustment deriving from the BCRA index is applied, which combines in equal parts the change in the CPI and the RIPTE wage index. Tenants paid the same rent for twelve months.
It happens that the acceleration of the inflationary pace, which marked a rise of 7% in August and could reach 100% according to the forecasts of the Market Expectations Survey (REM), gives an indication that the prices of rents grow faster than income families monthly.
An aggravating circumstance for tenants is that the demand for rental properties is decreasing as landlords fear entering into new contracts under the law that currently regulates the market. The law – effective from July 2020 – provides for a three-year period for each contract adjusted by the LCI, which is a mix of inflation and wages.
While the changes required by the various sectors to oil the market have not yet been addressed in Congress, landlords who decide to rent do so with some resistance and set higher plans to initiate contracts.
In September, the index that updates rents daily increased by 67%. However, the acceleration in prices continued to put even more pressure on the October index, which is also seen favored by the removal of subsidies to services, which will also affect tenants’ pockets through expenses. These expenses are estimated to represent 10% of the total cost of expenses.
Just the controversy over the increase in rents and the scarce supply of properties on the market, triggered an idea a few days ago among those who represent the tenants.
In this sense, the association Inquilinos Agrupados presented last week in the legislature of Buenos Aires a bill for homes in the city of Buenos Aires that remain empty for more than 90 consecutive days to enter “mandatory” a secure rental system, in an initiative that aims to provide a solution to the lack of properties available for rent.
Immediately, the response of the real estate companies was not long in coming. Through the CPI, the industry has retained what it is today “illegitimate and illegitimate” the project presented by Inquilinos Agrupados in the Buenos Aires legislature. “Beyond the illegality and illegitimacy of a provision of this kind, a system like the one proposed by this group, the same one that promoted the disastrous and failed rental law, would only serve to do more damage to our already beaten the sector, “he said. said the CPI in a statement.
Source: Clarin
