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DNU effect on rents: In the interior, the supply of housing increased up to 15%, but prices remain high - Infobae
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January 14, 2024
In several cities there are now more 2 and 3 room homes available, but quotes remain at a minimum of $150,000 per month
By José Luis Cieri
Little by little, the supply inside begins to grow and more agreements are made between owners and tenants. Prices remain high (Illustrative image Infobae)
In the context of the repeal of the Rental Law established by the Decree of Necessity and Urgency (DNU 70) of the national government, there is greater dynamics in the rental market in the interior of Argentina, with a gradual increase in the supply of households.
Owners are more satisfied with agreements that involve fewer regulations and adjustments that allow amounts to be updated in a shorter period of time. In various inland squares, the rental supply shows a growth of between 10 and 15% compared to last December. These are percentages similar to those recorded in the city of Buenos Aires.
In various locations, a recovery is observed in the availability of two- and three-bedroom homes. But it is noteworthy that, despite this increase in supply, rental values do not budge, remaining at a minimum threshold of $150,000 per month.
Mirta Líbera , president of the Real Estate Chamber of the Province of Buenos Aires, shared with Infobae that since the implementation of the DNU, an evolution has been observed in consultations and the predisposition to formalize contracts. “Although an abrupt increase is not perceived, several owners are returning and maintain intentions to rent their properties again. In towns like La Plata and other Buenos Aires cities, contracts with terms of one or two years proliferate, with quarterly or quarterly adjustments,” she noted.
In a context marked by high inflation, which reached 25.5% in December and closed the year 2023 at 211.4% , the trend in the provincial capital is to make adjustments through the Lease Contract Index (ICL) .
Líbera projects that, due to the high inflation of the first months, a progressive decrease is expected towards the middle of 2024. “The aim is to adapt rental contracts to economic volatility, guaranteeing a balance for the parties involved. It is important that both accept that, in the event of a gap, the update is carried out according to the Consumer Price Index (CPI).”
Great values
Current values for two-room rentals fluctuate between $180,000 and $250,000 per month in La Plata. In the case of units in buildings with amenities , prices start at $250,000, while in standard homes, the starting figure is $320,000 per month.
In the capital of the province of Buenos Aires, a two-room apartment starts at $180,000 per month
Líbera highlighted an auspicious trend towards growth in supply. “It is important to remain cautious, urging the parties involved to seek balanced agreements that safeguard the interests of both landlords and tenants, thus ensuring a harmonious relationship for the duration of the contract. It is vital that the macroeconomy is organized and that salaries are updated.”
In the Docta
In Córdoba capital, the reaction of the owners after the repeal of the DNU was instantaneous. Virginia Manzotti, president of the Federal Council of Real Estate Associations (COFECI), highlighted that the supply of properties intended for annual rentals “experienced a notable increase: those owners who previously chose to direct their properties towards temporary rentals returned to the annual format. And as we told our tenants and owners, values are adjusting to demand and that is extremely positive for both.”
Nueva Córdoba is one of the most sought-after areas in the capital of the Mediterranean province
While in CABA prices rose 260% year-on-year in 2023 , in the capital of Córdoba the increases in relation to contracts expired in December accumulated 222.9% in houses and 192.5% year-on-year in apartments.
“Regarding adjustment methods and contract terms, professionals evaluate each situation individually. Adjustments based on ICL, CPI or Index of the Argentine Chamber of Construction (CAC) are used,” commented Manzotti.
The values for two-room apartments in sought-after areas (Nueva Córdoba, Centro and Barrio General Paz) range from $200,000 to $350,000 per month depending on age or whether it has amenities.
The two environments among the most demanded in Córdoba land
Three-bedroom homes in the same areas range from $300,000 to $470,000, and the rent for two- or three-bedroom houses ranges between $300,000 and $750,000 depending on the area and condition of the home.
Rosario
In Rosario, supply is on the rise, although incipient and with a counterpart: a strong increase in values, accumulating an increase that in some cases reaches 250% year-on-year.Gabriela Ortiz de Urbina , president of the Rosario College of Real Estate Brokers, pointed out that it is too early to make exhaustive evaluations after the repeal of the DNU. Although the supply increased "it is a momentary vision: we recommend to both tenants and owners that when signing a contract a single update index is established according to reality, with reviews every three, four or six months, always in pesos."
Apartment designed for university students or for a couple. In Rosario, demand drives searches for this type of property at this time of year
The current agreements start from a lower point. Two-room apartments start at $150,000, and three-room apartments start at $200,000 per month. Three-room houses, without a garage in some neighborhoods, start at $250,000 a month.
Ortiz de Urbina added: “Newly or semi-new properties registered a notable increase, especially in neighborhoods close to the central area of Rosario, with increases that vary between 200% and 250%.”
Cuyo
In Mendoza capital, it was noted that inquiries increased since the DNU came into force and several owners who had their homes for sale are gradually renting them again, although they maintain the current marketing option.Eduardo Rosta , president of the College of Public Real Estate Brokers of Mendoza, pointed out that “the supply of real estate is increasing but the demand is still greater. At least we celebrate that the offer is currently increasing. The fact that there is not so much uncertainty regarding the updates makes the beginnings of the locations more reasonable.”
Prior to DNU, they observed that of every 100 properties published, approximately 6 were available for rent. Currently, out of every 100 listings, 10 present outstanding rental opportunities in a conducive environment.
In Mendoza capital, three-room apartments start at $180,000 per month
Rosta added: “We advise tenants to validate the information on the websites of professional associations and ensure that the offeror of a rental property is a licensed broker. Given the desperation, numerous scams are being reported, with frequent complaints of deposits of deposits without being able to see the property.”
In Mendoza capital, three-room apartments start at $180,000 per month and three-room houses start at $250,000 per month.
Northwest
Also in Salta capital, the supply grew and contracts are being agreed with terms of up to two years maximum, in pesos, and with quarterly adjustments by ICL or CPI. Although some tenants agree to sign them in dollars without adjustment and for twelve-month agreements.
In Salta capital, a notable increase in inquiries was observed, and several owners now agree to conclude agreements under the new regulations (Photo Courtesy: Lisardo F. Maggipinto)
Prices in Salta vary depending on the update frequency. In the case of a two-room apartment with adjustment every 6 months, the rent is $200,000; With a quarterly adjustment, the initial price is $150,000, and if the update is monthly, it starts at 100,000 pesos.
“In Tres Cerritos, a sought-after area, a rent for a three-bedroom that ended at $70,000 a month, now went to $350,000, so the increase is 400%, something unprecedented, highlighted Karen Ramos from Biella Inmobiliaria.
Market dynamics are going through a significant change, now properties are not being taken off the market. Previously, the average indicated that for every two expired contracts, only one was renewed; however, currently, all contracts are being renewed.
Ramos said: “To tenants, we always recommend that, when their contract is six months away from expiring, they do not wait for it to expire to look for a new one. This helps soften the impact and prevent increases. Likewise, we advise landlords to maintain a positive relationship with their tenants, as there are times of shortage of cash in circulation due to macroeconomic conditions.”
Patagonia
In Puerto Madryn the offer is also beginning to react. The owners, upon learning of the new regulations, showed interest in returning to the rental market.
Large kitchen of a home in the central area of Puerto Madryn
Laura Zucheli , president of the Association of Public Real Estate Brokers of Chubut, said that currently, “we recommend two-year contracts, with indexed adjustments every 4 months using the ICL, a measure that seeks to balance the expectations of both parties. Having freedom for contracts means advising tenants and owners so that moderation and careful rent prevail.”
In the last year, the rise in values has accumulated a rise of 240% year-on-year.
“On average, large studio apartments cost around $150,000, two-bedrooms cost $200,000, and three-bedrooms cost $300,000 plus expenses. The duplexes vary between $270,000 and $380,000 per month,” Zucheli explained.
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