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Relief for renters in Buenos Aires: The supply of properties has increased and there are lower prices in new contracts - Infobae
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Alivio para los alquileres porteños: creció la oferta de inmuebles y hay precios más bajos en los nuevos contratos
Según el último informe del Colegio Inmobiliario de CABA, los valores dejaron de incrementarse al nivel que lo hacían hasta mayo. En qué barrios hay más expansión de propuestas y cómo es la dinámica de los acuerdos
www.infobae.com
August 31, 2024
According to the latest report from the Real Estate Association of CABA, prices have stopped increasing at the level they were doing until May. In which neighborhoods is there more expansion of proposals and what is the dynamic of the agreements?
By Jose Luis Cieri
In Buenos Aires, rental prices are beginning to slow down at the starting point of the contracts and the offer grew almost 180% after the DNU (Illustrative Image Infobae)
Following Javier Milei 's decree repealing the Rental Law, the housing rental market in the city of Buenos Aires showed a strong change, with a drop in values of more than 40% below inflation until July.
According to private reports, nominal reductions are being seen in some contracts and counteroffers from tenants are increasingly being accepted in agreements, reflecting a change in market dynamics.
This was detected by the Buenos Aires Real Estate Association through the Statistical Observatory of the Real Estate Sector. Diego Frangella , head of the entity that brings together professionals from CABA, highlighted the rapid recovery of the supply. “It is very positive that tenants can choose between at least 15 to 20 properties, and this wide availability is contributing to the reduction of prices, allowing a greater number of interested parties to access them,” he told Infobae .
On portals such as Cabaprop, units are seen with lower prices compared to the previous month. For example, at Chaco 100, in Caballito, a three-room apartment, four years old and 90 square meters, which at the end of July cost $750,000, is now offered at $680,000 at the start of the contract. In the Botánico area of Palermo, the price of a two-room apartment dropped from $470,000 to $420,000 per month.
Previously, annual adjustments left landlords needing to hedge against inflation, often resulting in rents out of line with expenses, which in many cases were higher than the monthly rent.
Miguel Chej Muse , coordinator of the Observatory, highlighted the importance of the increase in supply, which intensified competition and stimulated a drop in prices. “An apartment that used to be rented in one day can now take up to three or four weeks to find a tenant. This dynamic fostered a more favorable environment for tenants, allowing them better conditions and more options to choose from,” he said.
As for the terms of the contracts, there was a marked preference for 24-month agreements in pesos, with quarterly adjustments based on the Indec CPI or the Central Bank's Lease Contract Index (ICL).
Contracts
The current supply of properties in Buenos Aires, which amounts to around 15,500 units, reflects the current market situation and an increase in the number of available properties is not expected.In CABA, nearly 12,500 housing rental agreements expire each month; most of these contracts are renewed , while only a fraction of tenants choose to look for new options.
“Contracts in pesos and for 24 months are preferred by both parties,” highlights the report from the Buenos Aires Real Estate Association, in line with current market trends (Illustrative Image Infobae)
“The development depends largely on factors such as inflation, the supply of real estate and the recovery of the purchasing power of wages. If inflation continues its downward trend, rental prices are likely to follow suit, providing relief to tenants,” added Chej Muse.
Expansion
The survey also confirmed that the supply of rental housing has grown by 177.91% since the DNU came into force. However, it is notable that last month there was a decrease of 5.87% compared to the previous month.“Since the repeal of the Rental Law, the supply in the city has multiplied by 35 since the beginning of 2024, but is now seeking a balance. Despite the new mortgage loans, the demand for rentals remains stable, as many do not meet the requirements,” explained Frangella.
Offer by Buenos Aires neighborhoods (Source: Statistical Observatory of the Real Estate Sector of the Real Estate Association)
Specifically, 95.59% of the offer corresponds to apartments in neighborhoods such as Palermo, Belgrano, Recoleta, Barrio Norte, Caballito and Puerto Madero, which together represent 60.46% of the total offer. Of these, Palermo is the neighborhood with the highest availability, although it experienced a decrease of 3.11% in the last month.
Frangella added: “The repeal of the law increased the supply of properties, stabilising the market and allowing real estate agents to resume their role as mediators between owners and tenants to facilitate agreements.”
Settings
The ICL index showed an increase of 247.56% for the adjustments corresponding to August 2024, although from January to July 2024, the accumulated increase is 130.36%, compared to the 87% recorded by the CPI in the same period.According to the average of publications on different portals until August 13, 2024, the supply of rental properties for housing represents 16.43% of the total market.
Source: Statistical Observatory of the Real Estate Sector of the Buenos Aires Real Estate Association
The growing acceptance of counteroffers is changing rental negotiations. Tenants are becoming more selective and are negotiating better prices and conditions, forcing landlords to adjust their expectations to ensure occupancy.
Chej Musse concluded: “Accepting counteroffers helps to occupy units and improves relations between parties, which is key to market stability and contract renewal.”
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