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Expenses have increased by 101.6% so far in 2024 and are putting pressure on the budgets of owners and tenants - Infobae
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www.infobae.com
August 11, 2024
Private analysis confirmed another strong monthly increase in the city of Buenos Aires. The number of late payments rose. What is the average value of expenses in CABA and what can be done to reduce common expenses in condominiums. Main recommendations
By Jose Luis Cieri
An administrator doing the math. More and more money is needed to pay expenses and the number of late payments is also increasing (Illustrative Image Infobae)
Expenses bring bad news for owners and tenants again. Various private analyses confirmed that the increase in July was once again a record: the increase is 101.6% so far in 2024. In addition, the reports confirmed that, month-on-month, the increase ranged between 5.12% and 7.5%, impacting the pocketbook.
According to ConsorcioAbierto, the average value of expenses in buildings in the city of Buenos Aires is $188,919. Meanwhile, Octopus Proptech confirmed another worrying fact: delinquency increased by 12.62% in the inter-monthly measurement and debtors in CABA are growing, a factor that plays against repairs and maintenance works in buildings.
Both analyses were based on more than 30,000 consortia, reflecting the average of all expenses: salaries, services, purchases, security, cleaning, maintenance and fees, which have risen due to inflation and the removal of energy and gas subsidies.
Albano Laiuppa , director of ConsorcioAbierto, stated that “ Expenses will continue to increase due to inflation, the payment of Christmas bonuses, as well as the increased use of boilers typical of this time of year. In addition, a new 5% increase has been established for building managers in July, which will impact on next month's expenses.”
Costs in buildings, without debts (ConsorcioAbierto)
Although the largest increase occurred during the first half of 2024, in the year-on-year comparison, until last month the increase accompanied inflation. “Now the key is to analyze how the increases will behave during the next few months,” Laiuppa added.
In the province of Buenos Aires, building expenses rose by 96.52% between January and July 2024.
The average in July was $74,340, compared to $69,503 in June, representing an increase of 6.95 percent.
During 2023, from January to October, the collection rate exceeded 90%, falling in November to 89.59% and in December to 89.41%, showing an increase in late payments. In general, almost nine out of ten functional units pay expenses monthly, while those who do not pay are usually the same: those with financial difficulties or who are selling their properties and pay the amount owed upon completion of the sale.
Building costs, without debt, by region (Consorcio Abierto)
“It is crucial to change from a reactive collection model to a proactive one; we should not wait for the debt to be generated, we must anticipate payment behaviors. If several owners or tenants are not banked, alternatives such as QR code payments should be considered,” said Nicolás Baccigalupo , CEO of Octopus Proptech.
Experts also stress the importance of implementing payment plans or installments and a program to avoid the accumulation of new debts for those who never pay.
Baccigalupo added: “We must understand a consortium as a business, despite being non-profit entities. The objective must be to collect expenses as quickly as possible to meet payment obligations, such as salaries and maintenance.”
It is important to consider the type of service and the type of payment to choose the appropriate payment method. Although direct debit may be ideal, in consortia some users prefer to review the expenses before paying.
Baccigalupo clarified: “It is essential to look for alternatives and offer various payment options that fit the user’s daily habits. Including a payment button or a QR code ( from this month, all expense settlements in CABA must include a QR code or a hyperlink that allows owners and tenants to directly access the supporting documentation), which today has almost universal acceptance, can be an effective solution.”
There are those who stop paying due to their economic situation, since the payment of expenses is among the first expenses that are cut (Illustrative Image Infobae)
Rodrigo Martínez Daveño , a lawyer and consortium administrator, said that “the main factors were the increases in the value of public service rates, such as gas, electricity and AySA. Maintenance costs also rose even above inflation, and in many cases there are no clear price references.”
For years now, consortium owners and administrations have been analysing and implementing actions to reduce costs, so the crisis that has worsened over the past year has not left much room for new measures.
New measures include eliminating overtime for caretakers on Sundays and holidays and delegating the task of taking out garbage to building occupants.
“The magnitude of the crisis no longer allows for minor savings measures such as turning off the lights in common areas or reducing the cost of cleaning products; more in-depth and more impactful measures are required,” said Martínez Daveño.
Preventive maintenance is becoming more and more difficult due to high costs and consortia must adjust their numbers well.
In some cases, it is possible to request a recategorization from Metrogas or the electric companies, although there are few cases in which this action is permitted. Banks such as Ciudad provide loans to repair gas appliances and boilers that are not in optimal condition and have high consumption.
The removal of energy and gas subsidies had a significant impact on utility bills. For example, a 35-unit building with a boiler and central heating system in Almagro paid $235,000 for gas in July 2023 and this year, with the same consumption, it pays just over $1 million. Meanwhile, a medium-sized building in Congreso paid $64,000 to AySA in July 2023 and in July 2024 it pays 466,000 pesos.
Expenses did not rise more than inflation last year, although some costs such as utility rates did exceed this measurement. “There was no greater increase in expenses because people are more concerned about the issue of expenses and putting pressure on administrators to make savings. In addition to the traditional increase, there are high expenses and maintenance, which have a wide price dispersion,” concluded Martínez Daveno.
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Source:
Las expensas aumentaron 101,6% en lo que va 2024 y presionan sobre los presupuestos de propietarios e inquilinos
Análisis privados confirmaron otro fuerte incremento mensual en la ciudad de Buenos Aires. Se elevó la morosidad. Cuál es valor promedio de las expensas en CABA y qué se puede hacer para bajar los gastos comunes en los consorcios. Principales recomendaciones
www.infobae.com
August 11, 2024
Private analysis confirmed another strong monthly increase in the city of Buenos Aires. The number of late payments rose. What is the average value of expenses in CABA and what can be done to reduce common expenses in condominiums. Main recommendations
By Jose Luis Cieri
An administrator doing the math. More and more money is needed to pay expenses and the number of late payments is also increasing (Illustrative Image Infobae)
Expenses bring bad news for owners and tenants again. Various private analyses confirmed that the increase in July was once again a record: the increase is 101.6% so far in 2024. In addition, the reports confirmed that, month-on-month, the increase ranged between 5.12% and 7.5%, impacting the pocketbook.
According to ConsorcioAbierto, the average value of expenses in buildings in the city of Buenos Aires is $188,919. Meanwhile, Octopus Proptech confirmed another worrying fact: delinquency increased by 12.62% in the inter-monthly measurement and debtors in CABA are growing, a factor that plays against repairs and maintenance works in buildings.
Averages and increases
The average expense on buildings (not including debts) in CABA corresponding to July is $188,919 and in June it was $175,727, compared to the expense for July 2023, of $51,628, the increase is 265.92% year-on-year.Both analyses were based on more than 30,000 consortia, reflecting the average of all expenses: salaries, services, purchases, security, cleaning, maintenance and fees, which have risen due to inflation and the removal of energy and gas subsidies.
Albano Laiuppa , director of ConsorcioAbierto, stated that “ Expenses will continue to increase due to inflation, the payment of Christmas bonuses, as well as the increased use of boilers typical of this time of year. In addition, a new 5% increase has been established for building managers in July, which will impact on next month's expenses.”
Costs in buildings, without debts (ConsorcioAbierto)
Although the largest increase occurred during the first half of 2024, in the year-on-year comparison, until last month the increase accompanied inflation. “Now the key is to analyze how the increases will behave during the next few months,” Laiuppa added.
In the province of Buenos Aires, building expenses rose by 96.52% between January and July 2024.
The average in July was $74,340, compared to $69,503 in June, representing an increase of 6.95 percent.
Debt and collectibility
In CABA, the average expense on buildings including debt was $225,648 in July and $211,780 in June, representing an increase of 6.54%. Compared to July 2023, when it was $67,418, the increase is 234.69% year-on-year. In the province of Buenos Aires, the average expense including debt was $94,010 in July and $89,182 in June, an increase of 5.41%. Compared to July 2023, when it was $29,311, the increase is 220.73% year-on-year.During 2023, from January to October, the collection rate exceeded 90%, falling in November to 89.59% and in December to 89.41%, showing an increase in late payments. In general, almost nine out of ten functional units pay expenses monthly, while those who do not pay are usually the same: those with financial difficulties or who are selling their properties and pay the amount owed upon completion of the sale.
Building costs, without debt, by region (Consorcio Abierto)
“It is crucial to change from a reactive collection model to a proactive one; we should not wait for the debt to be generated, we must anticipate payment behaviors. If several owners or tenants are not banked, alternatives such as QR code payments should be considered,” said Nicolás Baccigalupo , CEO of Octopus Proptech.
Experts also stress the importance of implementing payment plans or installments and a program to avoid the accumulation of new debts for those who never pay.
Baccigalupo added: “We must understand a consortium as a business, despite being non-profit entities. The objective must be to collect expenses as quickly as possible to meet payment obligations, such as salaries and maintenance.”
It is important to consider the type of service and the type of payment to choose the appropriate payment method. Although direct debit may be ideal, in consortia some users prefer to review the expenses before paying.
Baccigalupo clarified: “It is essential to look for alternatives and offer various payment options that fit the user’s daily habits. Including a payment button or a QR code ( from this month, all expense settlements in CABA must include a QR code or a hyperlink that allows owners and tenants to directly access the supporting documentation), which today has almost universal acceptance, can be an effective solution.”
Vital Tips
The increase in expenses in the last year was, on average, 280% in CABA. Most of this increase was not exclusively due to increases in the salaries of building managers.
There are those who stop paying due to their economic situation, since the payment of expenses is among the first expenses that are cut (Illustrative Image Infobae)
Rodrigo Martínez Daveño , a lawyer and consortium administrator, said that “the main factors were the increases in the value of public service rates, such as gas, electricity and AySA. Maintenance costs also rose even above inflation, and in many cases there are no clear price references.”
For years now, consortium owners and administrations have been analysing and implementing actions to reduce costs, so the crisis that has worsened over the past year has not left much room for new measures.
New measures include eliminating overtime for caretakers on Sundays and holidays and delegating the task of taking out garbage to building occupants.
“The magnitude of the crisis no longer allows for minor savings measures such as turning off the lights in common areas or reducing the cost of cleaning products; more in-depth and more impactful measures are required,” said Martínez Daveño.
Preventive maintenance is becoming more and more difficult due to high costs and consortia must adjust their numbers well.
In some cases, it is possible to request a recategorization from Metrogas or the electric companies, although there are few cases in which this action is permitted. Banks such as Ciudad provide loans to repair gas appliances and boilers that are not in optimal condition and have high consumption.
The removal of energy and gas subsidies had a significant impact on utility bills. For example, a 35-unit building with a boiler and central heating system in Almagro paid $235,000 for gas in July 2023 and this year, with the same consumption, it pays just over $1 million. Meanwhile, a medium-sized building in Congreso paid $64,000 to AySA in July 2023 and in July 2024 it pays 466,000 pesos.
Expenses did not rise more than inflation last year, although some costs such as utility rates did exceed this measurement. “There was no greater increase in expenses because people are more concerned about the issue of expenses and putting pressure on administrators to make savings. In addition to the traditional increase, there are high expenses and maintenance, which have a wide price dispersion,” concluded Martínez Daveno.
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