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“There is no market”: Real estate agencies have fewer and fewer homes and the rental supply continues to collapse
December 5, 2023
Finding a property is becoming more and more complex. The owners who recover properties prefer to wait for the new Government to take office because they understand that the current law can change. What tenants think and what they advise
By José Luis Cieri
A man supports the weight of a house on his shoulders, representing the challenges of high rents and increasing costs of living (Illustrative image Infobae)
Far from improving, the outlook for the rental market in the city of Buenos Aires is worsening. Since the president-elect Javier Milei announced the possible repeal of the current Rental Law , which is still in force, a postponement of contracts and a marked decrease in the available supply has been observed.
According to industry experts, expectations for changes in the sector are not many. The reluctance of owners to commit to three-year contracts, given the current economic volatility and inflationary uncertainty, is understandable and, according to specialists, strategic.
Likewise, groups of owners continue to argue the slogan of "No rent", keeping their properties on the sidelines until changes are made to the regulations sanctioned in June 2020, recently reformed in October by the National Congress.
At these critical moments, concern intensifies when observing how demand significantly exceeds available supply. Soledad Balayan, from Maure Inmobiliaria, shared her concern with Infobae : “In most real estate agencies there are no rental offers for housing, and the values that are published do not reflect the reality of the market. These prices are derived from a very small sample of properties: there is no true market.”
Currently, there are few options for 3-room homes and the few that exist are offered for $450,000 per month.
The scenario is complicated for owners and tenants. Real estate professionals are trying to agree on extensions for one year, or for a shorter period as agreed by the parties. With the hope of reversing this situation in the future political context.
Signing a rental contract is a challenge right now (Illustrative image Infobae)
“We maintain high expectations that the situation will begin to stabilize after the change of Government and the new Congress. The prolonged electoral calendar and the complications derived from the recent reform of the law generated a marked degree of uncertainty. It will be critical to repeal the law: if we return to two-year agreements and free adjustments between parties, the supply will return to pre-pandemic levels,” said Gustavo Lo Valvo, a sector expert in the Saavedra and Villa Urquiza area.
Advice
It is discouraging and distressing for both single people and families looking for housing not to find available options. The situation is aggravated by having to start the search 4 or 5 months before the expiration of the current contract.Balayan, advised: “I usually recommend to those who maintain a good bond with their landlords that they seek to maintain it and reach a balance that benefits both parties. The conception of the rental market as a zero-sum game, where the well-being of one implies the loss of the other, led us to the current situation. Without attractive rentals and without flexibility in contracts, the offer is compromised and this scenario is the worst situation for tenants.”
Another option could be to consider neighborhoods close to your current place of residence. Sometimes, there may not be housing available in Balvanera, but there may be in Monserrat. In this context, moving a few blocks could make the move easier.
Tenants
The groups that represent tenants assure that some real estate agencies postpone the signing of contracts or encourage the signing of “mixed” agreements, commercial agreements that allow residential use, with the purpose of avoiding the regulations established by law. This occurs at the same time that the repeal of the law is anticipated and the possibility of signing contracts in dollars as an alternative is promoted, with terms ranging between 6 months and a year, depending on the location.“The ideal is to advance contracts with current legislation that, contrary to what is believed, protects both owners and tenants, generating payable rates that allow the amount charged to be adjusted to the market situation, without losing profitability. This is through three-year contracts and with semiannual adjustments through the Casa Propia coefficient,” she told Natalia Ranzuglia of the National Tenant Movement.
It is claimed that illegal extensions are common today, involving the adjustment of contract terms while other conditions remain unchanged. However, it is noted that prices vary, deposit updates are requested and additional months are included, being accepted by many tenants in times of desperation.
Although contracts outside the law can be taken to court to demand their adaptation in accordance with current regulations, this process is expensive and does not guarantee an automatic resolution. Although you can correct the situation, this result is not always achieved.
“We see a growing displacement towards more remote areas of CABA, an increase in the overpopulation of properties that are not prepared for the number of people who occupy them, and the inclusion in the market of properties that do not meet the minimum standards of dignity for their occupation,” Ranzuglia concluded.
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