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Record rentals: prices in CABA increased almost 900% in just over three years Infobae
Source:
www.infobae.com
October 14, 2023
This is stated in a report that measured the increase since the beginning of the law that has just been modified in Congress. Throughout the country, the increases far exceeded accumulated inflation
By José Luis Cieri
A man carries the weight of a house on his shoulders, representing the challenges of high rents, rising costs of living and economic pressure (Illustrative image Infobae)
A recent private report revealed that since the entry into force of the Rental Law in Argentina, the increase in rental prices clearly exceeded inflation levels. This regulation, which was enacted in June 2020, negatively impacted access to housing.
Accumulated inflation during the 39 months that the law was in effect amounts to 611% and during the same period rental prices increased 892% in the city of Buenos Aires.
An analysis by the Economic Research Institute (IIE) of the Córdoba Stock Exchange highlighted that one of the most notable effects of the law was the reduction in the supply of rentals, which caused that, despite the inflationary acceleration in recent years, Rents increased further, due to a shortage of available units.
Three days ago, the Chamber of Deputies approved reforms to the Law, introducing some changes. The most relevant refer to the update period, which goes from annual to semi-annual, and the indexation, which goes from using the Lease Contract Index to the Casa Propia coefficient.
Since the 2020 law came into effect, the increase in rental prices exceeded accumulated inflation by between 30 and 280 points, in contrast to what happened in the same period of time until May 2020, when inflation was lower (203 %) and throughout the country rents rose below that figure.
Source: Economic Research Institute of the Córdoba Stock Exchange with data from the Central Bank, INDEC and Zonaprop
“We anticipate that the rule sanctioned by Congress this week will not change the current scenario: there were no significant modifications in the most harmful points of the Law (contract extension, updating and indexing), so we estimate that the offer will not react in any way. positive and the detrimental effects for the tenants of the Law passed in 2020 will persist,” Fabio Ezequiel Ventre, deputy director of the IIE of the Córdoba Stock Exchange, explained to Infobae .
According to the IIE analysis, the values rose between 782% and 832% in the west-south and north areas of Greater Buenos Aires (GBA), 666% in Rosario and 640% in Córdoba.
“We do not believe that this measure will modify the current critical situation. It seems that a change was made so that nothing changes. The supply is currently minimal and this will not alter the market situation. Although the adjustment is semiannual, it is not fair considering an annual inflation of 138.3%, which implies a loss of 65% of the initial value in the sixth month. Furthermore, the Own House index is not only lower than the Lease Contracts (ICL), but it is also reduced by 10% for its application in this case,” said Claudio Oseroff, representative of the owners of properties for rent in the province. from Neuquen.
In this city, a consensus was achieved between owners, real estate agents and tenants to carry out joint actions.
Source: Economic Research Institute of the Córdoba Stock Exchange with data from the Central Bank, INDEC and Zonaprop
Ana Fernández Borsot , co-founder of the Federal Tenant and Non-Owner Community, told Infobae: “in the face of resistance from sectors that sought to evade the law for three years, Congress reaffirmed the importance of maintaining the minimum legal term of 3 years, between other measures. “We managed to stop the attempted unconstitutional setback proposed by the real estate-financial sector without guaranteeing improvements in the affordable housing supply crisis.”
Currently in CABA the rent for a 1-bedroom apartment ranges from $200,000 per month, while a 2-bedroom apartment is $280,000 per month.
Diego Migliorisi, managing partner of Migliorisi Inmobiliaria, told Infobae that the modifications in the law are not beneficial: “These alterations are worse than the original law because they generate more uncertainty and discourage both investors and owners who continue to face losses due to inflation. Instead of correcting errors, they make the situation worse by introducing an uncertain coefficient. In this context, the regulations seem ineffective. It is essential to point out the complex inflationary environment that does not favor owners and investors,” he said.
Signing a rental contract under the current law and now with its modifications seems to be a difficult mission in Argentina: a greater shortage of supply and strong price increases are the protagonists (Photo: Getty)
Even in CABA, which had the largest increases in this period, rents remained 40 percentage points below inflation.
Ventre explained that before the current law the increases were more moderate due to “voluntary agreements in which owners and tenants reached consensus, achieving a balance in the semiannual adjustments, despite inflation.” But with the current regulation, he observed, “owners see constant losses in the face of inflation, which complicates the situation significantly.”
Reducing the update period from one year to six months will not offset the impact of the length of the contract, and will mainly affect tenants due to more frequent updates.
“The change in the update index to Own Home coefficient will not stimulate supply, since in the best scenario, rents will follow, with a delay, inflation. If salaries evolve below inflation, as has happened since 2020, rents will lose value during the term of the contract,” Ventre concluded.
www.buysellba.com
Source:
Alquileres récord: los precios en CABA aumentaron casi 900% en poco más de tres años
Así precisa un informe que midió la suba desde el inicio de la ley que acaba de ser modificada en el Congreso. En todo el país, los incrementos superaron ampliamente la inflación acumulada
www.infobae.com
October 14, 2023
This is stated in a report that measured the increase since the beginning of the law that has just been modified in Congress. Throughout the country, the increases far exceeded accumulated inflation
By José Luis Cieri
A man carries the weight of a house on his shoulders, representing the challenges of high rents, rising costs of living and economic pressure (Illustrative image Infobae)
A recent private report revealed that since the entry into force of the Rental Law in Argentina, the increase in rental prices clearly exceeded inflation levels. This regulation, which was enacted in June 2020, negatively impacted access to housing.
Accumulated inflation during the 39 months that the law was in effect amounts to 611% and during the same period rental prices increased 892% in the city of Buenos Aires.
An analysis by the Economic Research Institute (IIE) of the Córdoba Stock Exchange highlighted that one of the most notable effects of the law was the reduction in the supply of rentals, which caused that, despite the inflationary acceleration in recent years, Rents increased further, due to a shortage of available units.
Three days ago, the Chamber of Deputies approved reforms to the Law, introducing some changes. The most relevant refer to the update period, which goes from annual to semi-annual, and the indexation, which goes from using the Lease Contract Index to the Casa Propia coefficient.
Since the 2020 law came into effect, the increase in rental prices exceeded accumulated inflation by between 30 and 280 points, in contrast to what happened in the same period of time until May 2020, when inflation was lower (203 %) and throughout the country rents rose below that figure.
Source: Economic Research Institute of the Córdoba Stock Exchange with data from the Central Bank, INDEC and Zonaprop
“We anticipate that the rule sanctioned by Congress this week will not change the current scenario: there were no significant modifications in the most harmful points of the Law (contract extension, updating and indexing), so we estimate that the offer will not react in any way. positive and the detrimental effects for the tenants of the Law passed in 2020 will persist,” Fabio Ezequiel Ventre, deputy director of the IIE of the Córdoba Stock Exchange, explained to Infobae .
How was the increase in other areas?
The retraction of the offer is unprecedented. There are Buenos Aires neighborhoods where 1 and 2-bedroom apartments are not available, such as Agronomía. In Córdoba capital, according to the Federal Council of Real Estate Associations (Cofeci), supply was reduced by more than 37% in almost two years, and even in the midst of the inflationary acceleration of recent months, rental values grew well above the general price level.According to the IIE analysis, the values rose between 782% and 832% in the west-south and north areas of Greater Buenos Aires (GBA), 666% in Rosario and 640% in Córdoba.
Ventre said that the big difference between the price increases between CABA and GBA with the other cities in the interior is due to the reduction in supply in the most populated districts, where there are very few properties for rent. Furthermore, he highlighted, “the vast majority of those offered are for contracts outside the law or temporary contracts in dollars. And there we can see the great imbalance between supply and demand, the requests to rent in large cities put pressure on prices under the context of regulations that were harmful."
Mixed opinions
The changes promoted by the ruling party in Congress generated different opinions. The tenant groups celebrated them, but owners and real estate agents did not support the changes, despite the tax benefits introduced, such as the exemption from paying the monotax for income from the rental of up to two properties.“We do not believe that this measure will modify the current critical situation. It seems that a change was made so that nothing changes. The supply is currently minimal and this will not alter the market situation. Although the adjustment is semiannual, it is not fair considering an annual inflation of 138.3%, which implies a loss of 65% of the initial value in the sixth month. Furthermore, the Own House index is not only lower than the Lease Contracts (ICL), but it is also reduced by 10% for its application in this case,” said Claudio Oseroff, representative of the owners of properties for rent in the province. from Neuquen.
In this city, a consensus was achieved between owners, real estate agents and tenants to carry out joint actions.
Source: Economic Research Institute of the Córdoba Stock Exchange with data from the Central Bank, INDEC and Zonaprop
Ana Fernández Borsot , co-founder of the Federal Tenant and Non-Owner Community, told Infobae: “in the face of resistance from sectors that sought to evade the law for three years, Congress reaffirmed the importance of maintaining the minimum legal term of 3 years, between other measures. “We managed to stop the attempted unconstitutional setback proposed by the real estate-financial sector without guaranteeing improvements in the affordable housing supply crisis.”
Currently in CABA the rent for a 1-bedroom apartment ranges from $200,000 per month, while a 2-bedroom apartment is $280,000 per month.
Diego Migliorisi, managing partner of Migliorisi Inmobiliaria, told Infobae that the modifications in the law are not beneficial: “These alterations are worse than the original law because they generate more uncertainty and discourage both investors and owners who continue to face losses due to inflation. Instead of correcting errors, they make the situation worse by introducing an uncertain coefficient. In this context, the regulations seem ineffective. It is essential to point out the complex inflationary environment that does not favor owners and investors,” he said.
Dynamics prior to the Law
In the 3 years and 3 months of the Law being in effect prior to the 2020 changes (the same period since the current law came into effect), inflation had been 203% and rents rose below that reference throughout the country. country: in CABA they increased 164%, in Córdoba 153%, in Greater Buenos Aires between 133% and 148% and in Rosario 114%, the study of the Córdoba stock market specifies.
Signing a rental contract under the current law and now with its modifications seems to be a difficult mission in Argentina: a greater shortage of supply and strong price increases are the protagonists (Photo: Getty)
Even in CABA, which had the largest increases in this period, rents remained 40 percentage points below inflation.
Ventre explained that before the current law the increases were more moderate due to “voluntary agreements in which owners and tenants reached consensus, achieving a balance in the semiannual adjustments, despite inflation.” But with the current regulation, he observed, “owners see constant losses in the face of inflation, which complicates the situation significantly.”
What can happen
The extension of the contract remains at 3 years, which will not encourage supply in a context of high inflation and growing macroeconomic uncertainty. For tenants, this means maintaining high costs associated with contracts and difficulties in accessing housing.Reducing the update period from one year to six months will not offset the impact of the length of the contract, and will mainly affect tenants due to more frequent updates.
“The change in the update index to Own Home coefficient will not stimulate supply, since in the best scenario, rents will follow, with a delay, inflation. If salaries evolve below inflation, as has happened since 2020, rents will lose value during the term of the contract,” Ventre concluded.
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