The month of March has already begun and with annual inflation in the triple digits, rental prices are on fire. The most important incident in the complex situation suffered by the tenants is that the supply of real estate is decreasing accelerated after the entry into force of the new rental law. Accordingly, the prices more than doubled in the last year. Furthermore, in March, those who have to renew the annual rental value will have to face a sharp rise at 90%
This rate of increase is marked by the law in force since July 2020, which establishes that the rent must be updated every year, according to the Index of Rental Contracts (ICL), prepared by the Central Bank, on the basis of two components: salaries and the change in inflation.
As regards the provision of rental properties, only in the last year, the decrease reached 30%, according to the data processed by the Buenos Aires statistical agency on the basis of the publications of the Argenprop real estate portal.
According to Diego Migliorisi, managing partner of the real estate agency of the same name, “Although profitability has improved slightly, it is going through a moment of very little supply in the rental segment. In many cases Since there is no supply, the parts renew in the same place, meaning there is no rotation. Low profitability also makes some owners wait before signing a new contract that is at least 36 months long. As for prices, the update reflects the inflationary environment,” she explained.
According to records from the ZonaProp platform, in February, the rental value of a studio in CABA was $88,110 per month, a one-bedroom reached $107,835, and a 70m2 three-bedroom rented at an average of $144,639 per month. .
At the moment, Palermo is positioned as the most expensive neighborhood in the city of Buenos Aires with an average price of $135,122 per month. Meanwhile, the cheapest neighborhoods to rent are $Liniers ($80,429 a month), Floresta ($83,458), and Parque Patricios ($84,695).
The evolution of rental prices is uneven, depending on the type of property. According to the survey conducted by the University of San Andres and Mercado Libre, houses have experienced price drops. Instead, the departments continue to rise: the interim increases of CABA, GBA Norte and GBA Sur of 23.7%, 17.7% and 2.3% respectively. The explanation is that “the market for rental homes is considerable more dollarized compared to departments,” that study said.
Precisely, another situation that is influencing the drop in the supply of properties on the market is that many owners – by not agreeing to make contracts for three years and/or adjust rents only once a year- they transform their properties into temporary rent which implies shorter contracting periods and collection in dollars, since they are usually requested by tourists.
The owner of Gustavo De Simone Real Estate Solutions agrees that “the current situation of the rental market is very difficult. Supply decreases and demand is huge. This is why the values are very high and can be requested up to 25% more than it actually costs, which is reserved in a few hours,” he says.
According to the entrepreneur, “whatever the area, the owners are switching to temporary leasing, which gives them more profitability and in dollars. We are facing “the possible disappearance of regular income”warns.
The furor has reached such a point that a bill to create was introduced in Congress yesterday a national register of temporary rentals. This project, by the national senator of the FdT, Ana Maria Ianni, offers all tenants who intend to market houses for tourist rentals must register and be licensed with the nation’s Ministry of Tourism. And, in cases of non-compliance, it proposes sanctions.
“It is imperative that the bill moves forward in the Senate. The situation being experienced in tourist cities in terms of access to housing is dramatic,” says Gervasio Muñoz, president of the National Federation of Tenants.
“Dollarisation of rents, six-month contracts, rent-driven price increases for vacation rentals and exclusive conditions for renting a house are a consequence of the current deregulation. The world has been intervening in this matter for years and Argentina must do it urgently. ” proposed.
Source: Clarin
