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New rentals: what type of contract is most commonly used and how the drop in inflation is already impacting prices - Infobae
Source:
www.infobae.com
November 02, 2024
With free agreements, the parties negotiate adjustments in a market where priced properties rent quickly, while others can take up to 60 days to complete.
By Jose Luis Cieri
Today, the parties negotiate more about how to make contracts, there is more supply and not so much desperation, properties are not rented out like a year ago, when they were rented out almost without being seen beforehand (Illustrative Image Infobae)
In the local rental market, the drop in inflation began to affect prices and the adjustment methods of the latest contracts. With the end of the Rental Law through the Government's DNU , which will be one year old next month, free agreements gained ground and allowed tenants and owners to directly negotiate the updating mechanisms.
This flexibility has allowed properties with prices adjusted to current demand to be rented more quickly, while those that do not find a suitable price can take up to 60 days to be finalized and remain advertised without showing any interested parties.
This context brought a certain stability to tenants , who can opt for contracts in pesos, dollars or with adjustments that move away from the abrupt increases that the repealed law had.
In addition, the drop in the Consumer Price Index (CPI) , which is increasingly used in rental contracts, has provided some relief compared to other indices, such as the Rental Contract Index (ICL) . The latter, which in November adjusted pre-existing contracts by 227.14% year-on-year , still shows high variations despite having started a downward trend in the last three months.
The rental market in Argentina is undergoing “significant changes,” according to statements by Iván Ginevra , president of the Real Estate Chamber.
According to data provided by this entity, the inter-monthly adjustments increased by 3.5% through the CPI and by 5.21% through the ICL last October. In the first case, the inflationary decline is having a more favorable impact on tenants looking to rent.
Source: Argentine Real Estate Chamber (CIA)
Ginevra explained to Infobae that rental contracts are being adjusted based on the CPI. “The decrease in the CPI is positive compared to the ICL and is the most advisable method for new contracts, which mostly have quarterly adjustments and are already below inflation,” she said.
Patricio Bedetti , from Patricio Bedetti Servicios Inmobiliarios, pointed out that this oversupply allows some prices to remain stable and even decrease slightly in certain new properties on the market, “while properties already rented tend to adjust quarterly or four-monthly according to the CPI.”
This dynamic also led some tenants to opt to terminate their contracts early when they found better prices in the current offer.
“In these cases, the available options allow tenants to access more favourable contracts in a context that appears to be offering greater flexibility,” added Bedetti.
The largest increases in rental values are applied in the northern area of CABA (Illustrative Image Infobae)
Negotiations between landlords and tenants have become more flexible and slower. With an increasing supply and less urgent demand, properties are no longer rented as quickly as a year ago, when in many cases contracts were closed with almost no prior visits.
“However, a phenomenon of negotiation is being observed in closing prices, which are usually 15% to 20% lower than the published prices . In areas such as Caballito, Almagro and Boedo, prices vary according to the age, condition and services of the building. The largest price increases are recorded in the northern corridor of the city, in neighborhoods such as Palermo, Belgrano, Recoleta and Puerto Madero, where the offer in dollars is more common, commented Bedetti.
In contrast, prices are more contained in the southern area, including Parque Patricios, Pompeya, Lugano and parts of La Boca, due to the high cost of living that affects spending on food and services.
“Compared to a year ago, rents are more reasonable today, as they follow inflation more than wages. This allows tenants to choose between contracts in pesos, dollars or fixed values, according to their convenience,” Ginevra concluded.
www.buysellba.com
Source:
Nuevos alquileres: qué tipo de contrato es el más usado y cómo la baja de la inflación ya impacta en los valores
Con acuerdos libres, las partes negocian ajustes en un mercado donde las propiedades en precio se alquilan rápido, mientras que otras pueden demorar hasta 60 días en concretarse
www.infobae.com
November 02, 2024
With free agreements, the parties negotiate adjustments in a market where priced properties rent quickly, while others can take up to 60 days to complete.
By Jose Luis Cieri
Today, the parties negotiate more about how to make contracts, there is more supply and not so much desperation, properties are not rented out like a year ago, when they were rented out almost without being seen beforehand (Illustrative Image Infobae)
In the local rental market, the drop in inflation began to affect prices and the adjustment methods of the latest contracts. With the end of the Rental Law through the Government's DNU , which will be one year old next month, free agreements gained ground and allowed tenants and owners to directly negotiate the updating mechanisms.
This flexibility has allowed properties with prices adjusted to current demand to be rented more quickly, while those that do not find a suitable price can take up to 60 days to be finalized and remain advertised without showing any interested parties.
This context brought a certain stability to tenants , who can opt for contracts in pesos, dollars or with adjustments that move away from the abrupt increases that the repealed law had.
In addition, the drop in the Consumer Price Index (CPI) , which is increasingly used in rental contracts, has provided some relief compared to other indices, such as the Rental Contract Index (ICL) . The latter, which in November adjusted pre-existing contracts by 227.14% year-on-year , still shows high variations despite having started a downward trend in the last three months.
The rental market in Argentina is undergoing “significant changes,” according to statements by Iván Ginevra , president of the Real Estate Chamber.
According to data provided by this entity, the inter-monthly adjustments increased by 3.5% through the CPI and by 5.21% through the ICL last October. In the first case, the inflationary decline is having a more favorable impact on tenants looking to rent.
Source: Argentine Real Estate Chamber (CIA)
Ginevra explained to Infobae that rental contracts are being adjusted based on the CPI. “The decrease in the CPI is positive compared to the ICL and is the most advisable method for new contracts, which mostly have quarterly adjustments and are already below inflation,” she said.
Dynamic
The drop in inflation and the growing use of the CPI as an index influence the rental market, where supply far exceeds demand .Patricio Bedetti , from Patricio Bedetti Servicios Inmobiliarios, pointed out that this oversupply allows some prices to remain stable and even decrease slightly in certain new properties on the market, “while properties already rented tend to adjust quarterly or four-monthly according to the CPI.”
This dynamic also led some tenants to opt to terminate their contracts early when they found better prices in the current offer.
“In these cases, the available options allow tenants to access more favourable contracts in a context that appears to be offering greater flexibility,” added Bedetti.
The largest increases in rental values are applied in the northern area of CABA (Illustrative Image Infobae)
Negotiations between landlords and tenants have become more flexible and slower. With an increasing supply and less urgent demand, properties are no longer rented as quickly as a year ago, when in many cases contracts were closed with almost no prior visits.
Reference values
Regarding the current average prices in the city of Buenos Aires, Bedetti reported that one-room apartments are available on average for $300,000 , one-bedroom apartments for $400,000 and two-bedroom apartments for $650,000 per month .“However, a phenomenon of negotiation is being observed in closing prices, which are usually 15% to 20% lower than the published prices . In areas such as Caballito, Almagro and Boedo, prices vary according to the age, condition and services of the building. The largest price increases are recorded in the northern corridor of the city, in neighborhoods such as Palermo, Belgrano, Recoleta and Puerto Madero, where the offer in dollars is more common, commented Bedetti.
In contrast, prices are more contained in the southern area, including Parque Patricios, Pompeya, Lugano and parts of La Boca, due to the high cost of living that affects spending on food and services.
“Compared to a year ago, rents are more reasonable today, as they follow inflation more than wages. This allows tenants to choose between contracts in pesos, dollars or fixed values, according to their convenience,” Ginevra concluded.
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