BuySellBA
Administrator
Expenses in 2024 rose more than inflation: what were the causes and what is expected for this year - Infobae
Source:
www.infobae.com
January 10, 2025
A private report highlighted that they rose by almost 5% in December compared to the previous month and 166% for the entire year. Why in 2025 the increases will be much more moderate, according to experts
By Jose Luis Cieri
Calculator in hand, utilities such as gas and electricity had different impacts on reported expenses for the year (Adobe Stock)
Expenses were once again the subject of a strong adjustment in December 2024 and closed 2024 with an increase that would have been well above inflation.
According to a private report, in the last month of the year, average expenses were $177,682 , an amount that meant a monthly increase of 4.99% and an accumulated annual increase of 166.69% , a record for buildings in the city of Buenos Aires.
This behavior reflects the tensions faced by both administrations and residents throughout the year every time they received their bill for expenses.
The calculation of average expenses was carried out on more than 125,000 households analyzed mainly between CABA and Greater Buenos Aires.
This report was shared by Octopus Proptech. Nicolás Baccigalupo , CEO of the platform specialized in this sector, explained to Infobae that expenses usually respond with a lag to inflation rates: “This sector, by its nature, presents a deferred inflation effect. In a scenario of falling inflation, providers adjust their rates with a lag, which can lead to increases above the inflation rate.”
He also explained how this process seeks to compensate for the imbalances arising from periods of high inflation such as those experienced previously, especially up to last August.
In fact, according to the survey, the months of January, May, June and July presented the peaks of impact due to the payment of the Christmas bonus and salary negotiations.
Source: Octopus Proptech
"The union in the sector achieved very beneficial agreements . In contrast to other unions, which even lost out to inflation, this one managed to maintain historically high bonuses," said Baccigalupo.
Other items, such as utilities, also contributed to the rise in expenses. From May to November 2024, electricity and gas consumption increased budgets, although December showed a decrease in gas-related costs due to seasonality.
Baccigalupo added: “The drop in December is explained by the lower use of boilers, while electricity, as it depends on private air conditioners, does not impact the general expenses of the consortium.”
Along these lines, from the Liga del Consorcista de la Propiedad Horizontal Foundation, its president David Loisi , highlighted a recurring practice that affected the consortia: “In 2024 we observed how maintenance or security companies doubled their increases compared to the inflation index, which forces us to review contracts and demand competitive budgets to avoid abuses.”
Octopus Proptech predicts a more stable year as inflation continues to slow down and the macroeconomy stabilises. “With a more balanced context, expenses will not vary significantly, allowing administrations to focus on long-term solutions,” said Baccigalupo, who suggested that this scenario would be appropriate to optimise management and strengthen relations between consortia, owners and suppliers.
Among the strategies that are being considered, Loisi highlighted options that several consortia have already implemented, such as eliminating overtime for caretakers, hiring cleaning companies instead of hiring new employees, and renting common spaces. “More than 55% of those surveyed no longer have a caretaker with a home. This allows for significant savings in social security and wages,” she explained.
On the other hand, technology is also presented as a key resource to optimize operating costs within administrations. “Some administrations adopted 100% online expenses, with payments via QR and digital platforms that allow owners to control their expenses. These tools, in addition to being cheaper, eliminate the need for paperwork,” highlighted the report on sector trends.
Despite the proposed strategies, the relationship between administrations and owners remains a sensitive point, especially in the face of delays or lack of clarity in the management of resources.
The postponed maintenance plans also cause inconvenience. This situation has a direct impact on the perceptions of the residents: “The lack of necessary works increases discontent and, in the long term, generates higher costs due to accumulated deterioration,” said Loisi.
“A recurring phenomenon this year was that several families adjusted their budgets because they prioritized other needs and stopped paying full expenses,” Baccigalupo explained.
Among the recommendations to improve collection, he highlighted the implementation of incentive systems such as discounts for prompt payment or penalties for late payment, strategies already adopted by some consortia with good results.
Source: Octopus Proptech
The sector, which brings together administrators and condominium owners, anticipates that macroeconomic stability will be key to mitigating future increases and ensuring greater predictability in building management.
Postponing works or repairs can cause serious long-term problems both in the state of the building and in the perception of the residents towards the administration. “To avoid this, it is advisable to draw up an annual works plan in an assembly, which prioritizes the most urgent needs. In case of lack of funds, the reserve fund can be used or, if necessary, extraordinary fees can be discussed,” said Loisi.
However, the lack of action by some administrators generates widespread discontent, especially when essential services are suspended or problems in common areas that affect the apartments are not resolved, which in the future represents higher costs for the owners.
Loisi highlighted that WhatsApp groups have also become popular as a tool for quick communication between residents and the administration.
Although these measures improve efficiency, it is important that the technologies do not exclude older owners who prefer to receive expenses in paper format. In this context, Loisi stressed the need for greater control over expenses, to avoid unjustified commissions and to seek cheaper alternatives for recurring services.
www.buysellba.com
Source:
Las expensas en 2024 se dispararon más que la inflación: cuáles fueron las causas y qué se espera para este año
Un informe privado destacó que treparon casi 5% en diciembre frente al mes anterior y 166% en todo el año. Por qué en 2025 los aumentos serán mucho más moderados, según los expertos
www.infobae.com
January 10, 2025
A private report highlighted that they rose by almost 5% in December compared to the previous month and 166% for the entire year. Why in 2025 the increases will be much more moderate, according to experts
By Jose Luis Cieri
Calculator in hand, utilities such as gas and electricity had different impacts on reported expenses for the year (Adobe Stock)
Expenses were once again the subject of a strong adjustment in December 2024 and closed 2024 with an increase that would have been well above inflation.
According to a private report, in the last month of the year, average expenses were $177,682 , an amount that meant a monthly increase of 4.99% and an accumulated annual increase of 166.69% , a record for buildings in the city of Buenos Aires.
This behavior reflects the tensions faced by both administrations and residents throughout the year every time they received their bill for expenses.
The calculation of average expenses was carried out on more than 125,000 households analyzed mainly between CABA and Greater Buenos Aires.
This report was shared by Octopus Proptech. Nicolás Baccigalupo , CEO of the platform specialized in this sector, explained to Infobae that expenses usually respond with a lag to inflation rates: “This sector, by its nature, presents a deferred inflation effect. In a scenario of falling inflation, providers adjust their rates with a lag, which can lead to increases above the inflation rate.”
He also explained how this process seeks to compensate for the imbalances arising from periods of high inflation such as those experienced previously, especially up to last August.
Factors behind the increases in 2024
Various items that make up the expenses were decisive in this historic increase. Among them, labor expenses for salaries and social security contributions of the supervisors were positioned as one of the largest charges.In fact, according to the survey, the months of January, May, June and July presented the peaks of impact due to the payment of the Christmas bonus and salary negotiations.
Source: Octopus Proptech
"The union in the sector achieved very beneficial agreements . In contrast to other unions, which even lost out to inflation, this one managed to maintain historically high bonuses," said Baccigalupo.
Other items, such as utilities, also contributed to the rise in expenses. From May to November 2024, electricity and gas consumption increased budgets, although December showed a decrease in gas-related costs due to seasonality.
Baccigalupo added: “The drop in December is explained by the lower use of boilers, while electricity, as it depends on private air conditioners, does not impact the general expenses of the consortium.”
Along these lines, from the Liga del Consorcista de la Propiedad Horizontal Foundation, its president David Loisi , highlighted a recurring practice that affected the consortia: “In 2024 we observed how maintenance or security companies doubled their increases compared to the inflation index, which forces us to review contracts and demand competitive budgets to avoid abuses.”
Preventive strategies towards 2025
The focus is now on what will happen with expenses in 2025 and what tools the consortia will be able to use to mitigate costs.
Octopus Proptech predicts a more stable year as inflation continues to slow down and the macroeconomy stabilises. “With a more balanced context, expenses will not vary significantly, allowing administrations to focus on long-term solutions,” said Baccigalupo, who suggested that this scenario would be appropriate to optimise management and strengthen relations between consortia, owners and suppliers.
Among the strategies that are being considered, Loisi highlighted options that several consortia have already implemented, such as eliminating overtime for caretakers, hiring cleaning companies instead of hiring new employees, and renting common spaces. “More than 55% of those surveyed no longer have a caretaker with a home. This allows for significant savings in social security and wages,” she explained.
On the other hand, technology is also presented as a key resource to optimize operating costs within administrations. “Some administrations adopted 100% online expenses, with payments via QR and digital platforms that allow owners to control their expenses. These tools, in addition to being cheaper, eliminate the need for paperwork,” highlighted the report on sector trends.
Despite the proposed strategies, the relationship between administrations and owners remains a sensitive point, especially in the face of delays or lack of clarity in the management of resources.
The postponed maintenance plans also cause inconvenience. This situation has a direct impact on the perceptions of the residents: “The lack of necessary works increases discontent and, in the long term, generates higher costs due to accumulated deterioration,” said Loisi.
Delinquency on the rise
On the other hand, the default rate continues to increase because many families have had difficulty covering all their expenses, especially when extraordinary expenses arise. Currently, the default rate in the payment of expenses averages 35%, and in certain consortia it reaches 40%, which further deepens the problem.“A recurring phenomenon this year was that several families adjusted their budgets because they prioritized other needs and stopped paying full expenses,” Baccigalupo explained.
Among the recommendations to improve collection, he highlighted the implementation of incentive systems such as discounts for prompt payment or penalties for late payment, strategies already adopted by some consortia with good results.
Source: Octopus Proptech
The sector, which brings together administrators and condominium owners, anticipates that macroeconomic stability will be key to mitigating future increases and ensuring greater predictability in building management.
Postponing works or repairs can cause serious long-term problems both in the state of the building and in the perception of the residents towards the administration. “To avoid this, it is advisable to draw up an annual works plan in an assembly, which prioritizes the most urgent needs. In case of lack of funds, the reserve fund can be used or, if necessary, extraordinary fees can be discussed,” said Loisi.
However, the lack of action by some administrators generates widespread discontent, especially when essential services are suspended or problems in common areas that affect the apartments are not resolved, which in the future represents higher costs for the owners.
Loisi highlighted that WhatsApp groups have also become popular as a tool for quick communication between residents and the administration.
Although these measures improve efficiency, it is important that the technologies do not exclude older owners who prefer to receive expenses in paper format. In this context, Loisi stressed the need for greater control over expenses, to avoid unjustified commissions and to seek cheaper alternatives for recurring services.
www.buysellba.com
