While in Congress they began debating the changes being pushed by lawmakers for the rental law and to counter-among other negative effects- the limited supply of real estate, Profitability for those who put their properties on the rental market has shown a slight improvement in recent months. Even starting with a very low base compared to other seasons, the average rent in the neighborhoods the city of Buenos Aires stands at 2.82%six months ago, it was 2.6%, according to records of the Real Estate Report site.

This slight increase in income that owners can get is related to the trend towards deletion of the register of assets in a recessionary market and strong increase in rent prices, mainly due to the effects produced by the law regulating the sector since July 2020.

One of these effects is the collapse of supply: it is estimated that, in Buenos Aires, there will be in January 2021, some 9,000 rental property reduced to a 5,000many of these are operated using temporary rentals.

Reporte Inmobiliario’s annual profitability estimate is made by crossing the effective sale prices of two -bedroom apartments with rents earned for this type of unit. The average annual total rent for a commonly used apartment in Buenos Aires (2.82%), represents 52% of the gain in 2017 and 2018 before the scale of strong devaluations that began in the second quarter of last year.

“Far, a decade ago, the hours rent yielded 1% per month. Given the convertibility, this margin was approximately 4 annual points below, to penetrate after the convertibility crisis in 2002, the threshold was 5% per year and fluctuated between that year and until four years ago between 3 and 5.5% per year. ”, RI analysts recalled.

“Over the past four years, rental profitability has gradually dropped to less than 2 percentage points when measured by mid-2020. Then, it started to gradually recover, but still not exceed 3%. average annual income, “the source said.

“Although total revenue has improved, it is far from being considered quite attractive compared to what was earned in previous years and compared to what was earned in other aggregate foreign cities where the average is about 5% per year, with lower associated risk ”, reported the expert site.

Within the average annual income, there is also a gap between different neighborhoods: for example, in areas such as San Telmo or San Cristobal, the rent is 3.42% and 3.53% per annum respectively. There is an intermediate band, such as the Villa Crespo neighborhood, where the average is 3.35%, and a lower one, where the annual total revenue almost exceeds 2%. This is the case of Barrio Norte (2.14%) and Belgrano R (2.12%), according to the investigation.

In the province of Buenos Aires, according to the records of the ZonaProp platform, also rent has been rising since June 2020: north of the GBA it reaches 3.29% per year. And to the south and west, it is positioned at 2.88% annual.

From the Real Estate Report, they explain why it is important to reactivate the rental market and, as a result, profitability: profitability is an important element to drive the interest of private parties in remaining and/or entering the residential rental market ”, they pointed out.

From the point of view of economist Martin Calveira, from the Universidad Austral business school, “it is necessary to establish a balance between bidders and demanders, that is, owners and tenants. The problem involves stabilizing the whole price structure of the economy, there is no solution for a sector, because you have to think that economic prices work in a matrix where permanent interrelationships are exposed ”, he said. opined on the subject of rents.