The official inflation numbers, which were 94.8% annually, deepened the uncertainty among landlords and tenants. Renting in Argentina has become a problem: partly, due to the lack of a reference value and on the other hand, the regulation required by the rental law.
The owners increase the rental value and are on hand in case of a possible price increase. This in turn, It is a vicious circle because it does not allow to have a reference of the real valuethe market is governed by the fear of giving a value that will be outdated in a few months.
According to the latest report on rental prices as of January 15 prepared by the Scalabrini Ortiz Center for Economic and Social Studies (CESO), increases from December 2022 were 6.2% across studies2.6% for those with 2 bedrooms and 4.3% those with 3 rooms.
The tenants find themselves with a big problem when the contract expires, because the indexing used in the 3 years preceding the renewal was applied to a valuer, today, anachronistic.
In the city of La Plata, according to real estate agents, “Three years ago the rent for a studio apartment was between $15,000 and $17,000., depending on the area. those contracts which closed in December 2022, made it worth approximately $45,700.”
However, tenant renewalprivate or real estate, they will find valuefor the same department and in the same area as: $62,000 to index according to what is indicated by the Index of Real Estate Lease Contracts, which by law is composed of the consumer price index (CPI) and the average taxable salary of stable workers (Ripte).
This can be seen in other major cities of the country. In 12 months, the price of a studio apartment in Capital Federal has increased by 102.9%. for those of 2 environments the increase was 105.1% Y 100% in those with 3 bedrooms. This last figure marked the crossing of a limit: Properties with 1 and 2 bedrooms had already doubled their price, now those with 3 bedrooms have been added.
“Although leasing can pose problems when it comes to obtaining guarantees or paying commissions, the cost of rent is the first barrier to entry”, states the report.
According to CESO, studio apartments offered in the federal capital round those out by $69,000 on averageIf the living and mobile minimum wage is taken into account, which in January it is $65,427that salary covers 94.8% of a rental. This ratio, which at the end of 2021 had improved and stood at around 104%, it is now down nearly 10 percentage points from last year.
Meanwhile, one-bedroom apartments average about $80,000 and those with three rooms run around $120,000.
In each category, prices vary depending on other features such as age, garage, storage, patio, amenities, and ambiance.
The rental value is not unique, to this we must add the value of the expenses, reaching an average of 15.3% of the cost of the asking price of a rental.
“In the Autonomous City of Buenos Aires, high prices prevent a large part of the population from renting even an average studio flat, pushing them towards areas with lower quality infrastructure and services”, warns Ceso.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.