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Rental Law: real estate companies fear that there will be even less housing supply due to the project approved in the Senate - Infobae
Source:
www.infobae.com
September 29, 2023
Experts warn about an unprecedented crisis in the rental market in Argentina, with a deficit of up to 15,000 properties in CABA. The recent bill to reform the law could aggravate shortages and informality, according to sectoral entities.
By José Luis Cieri
Accessing housing through a rental contract became complicated in Argentina. The shortage of supply is advancing and price increases are increasingly straining the pockets of tenants.
Last night, the Senate approved changes to the reform of the Rental Law approved in June 2020. Due to these modifications, the project must return to the Chamber of Deputies for a new review. In this context, the real estate market faces growing uncertainty. There is a trend towards the extension of contracts and the increase in informal agreements between owners and tenants, which operate outside of current legislation.
The debate focused on the official proposal that seeks to reform key aspects. Among them, maintaining the duration of rental contracts at three years, instead of the two years suggested in the half-sanction of Deputies; adjust the rental price at least every six months by agreement between the parties, as opposed to the quarterly updates proposed by the opposition; and adopt the Home Ownership coefficient as an adjustment indicator, instead of the current Rental Contract Index (ICL), which combines the variation in salaries and inflation. The proposal also discards the option approved by Deputies, which allowed the parties to freely choose the adjustment index, such as the Consumer Price Index (CPI).
Given the electoral calendar, it is likely that the review of the project in the Chamber of Deputies will be postponed until after the October 22 elections.
For now nothing has changed and the contracts signed are still valid. The way they are done will only change when the law reform is finalized, and everything seems to indicate that it would be from the future Government.
After the approval of changes to the Rental Law by the national Senate, the Federal Council of Real Estate Associations of the Argentine Republic (Cofeci) expressed its disagreement. In a statement, the entity, which represents more than 40,000 professionals in the sector, noted that it has participated in multiple meetings with senators to present alternatives to Law 27,551, enacted in June 2020, which has generated a crisis in the rental market.
Representatives of Cofeci argue that they presented specific data on the current real estate situation that was not considered. In Córdoba capital, for example, the supply of rental homes decreased by 37% between June 2021 and July 2023, and the prices of new contracts exceed those of expired contracts by 232%.
Virginia Manzotti , president of Cofeci, told Infobae that “many senators seem disinterested in the problems of the sector.”
Cofeci's office adds that the bill not only maintains the minimum duration of contracts at three years, but also establishes semiannual updates based on the Casa Propia index, which could aggravate the crisis in the sector.
There is uncertainty, but whoever signs a rental contract today continues to do so under the conditions of the regulations enacted in June 2020: with three-year terms and interannual updates.
For its part, the Buenos Aires Real Estate Professional Association (CPI) reported that the project does not respect the positions presented by sector entities in previous meetings with members of the legislative commissions.
The entity warns that the project does not provide a solution to the problem, and, if implemented, would cause a situation even worse than that generated by the current legal regulation of the market.
“Maintaining contracts with a minimum term of three years and determining an update rate that is half of real inflation, the rule would cause an even greater drop in supply, deepening the current crisis, which is already the worst in history.” of the sector,” said Marta Liotto , president of the Buenos Aires CPI.
Minimum bids
In La Plata, the supply of rental homes is scarce, with increases that exceed 200% year-on-year, well above the Rental Contract Index (ICL), which registers an increase of 115% year-on-year.
Mirta Líbera , president of the Real Estate Chamber of the Province of Buenos Aires (CIBA), indicated that the project approved by the Senate is considered more harmful than the current legislation. According to comparisons, the Casa Propia index is 40% below inflation, while the Rental Contracts Index (ICL) is between 20% and 30% below. These conditions could discourage supply and drive away owners, which would aggravate the decrease in housing available for rent.”
Experts in the real estate sector indicate that the current situation is unprecedented in the last four decades. There are real estate agencies that do not have properties available for traditional rental. The demand is such that people resort to desperate consultations with family, friends or through social networks, without finding solutions.
It is estimated that in La Plata there is a deficit of approximately 2,000 properties to satisfy demand, while in the city of Buenos Aires the figure rises to about 15,000. Today in La Plata there are about 20 apartments for traditional rent and in CABA, the offer is made up of less than 450 apartments.
“The bill to reform the law could exacerbate shortages and informality in the market. Although there were expectations of improvement, the decision taken by the Senate does not contribute to resolving the situation,” Líbera concluded.
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Source:
Ley de Alquileres: inmobiliarias temen que haya aún menos oferta de viviendas por el proyecto aprobado en el Senado
Expertos alertan sobre una crisis inédita en el mercado de alquileres en la Argentina, con un déficit de hasta 15.000 inmuebles en CABA. El proyecto reciente de reforma de la ley podría agravar la escasez y la informalidad, según entidades sectoriales
www.infobae.com
September 29, 2023
Experts warn about an unprecedented crisis in the rental market in Argentina, with a deficit of up to 15,000 properties in CABA. The recent bill to reform the law could aggravate shortages and informality, according to sectoral entities.
By José Luis Cieri
Accessing housing through a rental contract became complicated in Argentina. The shortage of supply is advancing and price increases are increasingly straining the pockets of tenants.
Last night, the Senate approved changes to the reform of the Rental Law approved in June 2020. Due to these modifications, the project must return to the Chamber of Deputies for a new review. In this context, the real estate market faces growing uncertainty. There is a trend towards the extension of contracts and the increase in informal agreements between owners and tenants, which operate outside of current legislation.
The debate focused on the official proposal that seeks to reform key aspects. Among them, maintaining the duration of rental contracts at three years, instead of the two years suggested in the half-sanction of Deputies; adjust the rental price at least every six months by agreement between the parties, as opposed to the quarterly updates proposed by the opposition; and adopt the Home Ownership coefficient as an adjustment indicator, instead of the current Rental Contract Index (ICL), which combines the variation in salaries and inflation. The proposal also discards the option approved by Deputies, which allowed the parties to freely choose the adjustment index, such as the Consumer Price Index (CPI).
Given the electoral calendar, it is likely that the review of the project in the Chamber of Deputies will be postponed until after the October 22 elections.
For now nothing has changed and the contracts signed are still valid. The way they are done will only change when the law reform is finalized, and everything seems to indicate that it would be from the future Government.
After the approval of changes to the Rental Law by the national Senate, the Federal Council of Real Estate Associations of the Argentine Republic (Cofeci) expressed its disagreement. In a statement, the entity, which represents more than 40,000 professionals in the sector, noted that it has participated in multiple meetings with senators to present alternatives to Law 27,551, enacted in June 2020, which has generated a crisis in the rental market.
Representatives of Cofeci argue that they presented specific data on the current real estate situation that was not considered. In Córdoba capital, for example, the supply of rental homes decreased by 37% between June 2021 and July 2023, and the prices of new contracts exceed those of expired contracts by 232%.
Virginia Manzotti , president of Cofeci, told Infobae that “many senators seem disinterested in the problems of the sector.”
Cofeci's office adds that the bill not only maintains the minimum duration of contracts at three years, but also establishes semiannual updates based on the Casa Propia index, which could aggravate the crisis in the sector.
There is uncertainty, but whoever signs a rental contract today continues to do so under the conditions of the regulations enacted in June 2020: with three-year terms and interannual updates.
For its part, the Buenos Aires Real Estate Professional Association (CPI) reported that the project does not respect the positions presented by sector entities in previous meetings with members of the legislative commissions.
The entity warns that the project does not provide a solution to the problem, and, if implemented, would cause a situation even worse than that generated by the current legal regulation of the market.
“Maintaining contracts with a minimum term of three years and determining an update rate that is half of real inflation, the rule would cause an even greater drop in supply, deepening the current crisis, which is already the worst in history.” of the sector,” said Marta Liotto , president of the Buenos Aires CPI.
Minimum bids
In La Plata, the supply of rental homes is scarce, with increases that exceed 200% year-on-year, well above the Rental Contract Index (ICL), which registers an increase of 115% year-on-year.
Mirta Líbera , president of the Real Estate Chamber of the Province of Buenos Aires (CIBA), indicated that the project approved by the Senate is considered more harmful than the current legislation. According to comparisons, the Casa Propia index is 40% below inflation, while the Rental Contracts Index (ICL) is between 20% and 30% below. These conditions could discourage supply and drive away owners, which would aggravate the decrease in housing available for rent.”
Experts in the real estate sector indicate that the current situation is unprecedented in the last four decades. There are real estate agencies that do not have properties available for traditional rental. The demand is such that people resort to desperate consultations with family, friends or through social networks, without finding solutions.
It is estimated that in La Plata there is a deficit of approximately 2,000 properties to satisfy demand, while in the city of Buenos Aires the figure rises to about 15,000. Today in La Plata there are about 20 apartments for traditional rent and in CABA, the offer is made up of less than 450 apartments.
“The bill to reform the law could exacerbate shortages and informality in the market. Although there were expectations of improvement, the decision taken by the Senate does not contribute to resolving the situation,” Líbera concluded.
www.buysellba.com
