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Rental prices are updated and again there is a historical record: What is the increase in February and how to calculate it - Infobae
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Se actualizan los precios de los alquileres y otra vez hay récord histórico: cuál es el aumento de febrero y cómo calcularlo
Los contratos firmados bajo la anterior Ley de Alquileres que siguen vigentes y se actualizan anualmente sufrirán un ajuste sin precedentes
www.infobae.com
January 26, 2024
Contracts signed under the previous Rental Law that remain in force and are updated annually will suffer an unprecedented adjustment
By José Luis Cieri
Those who need to adjust their rent in February will experience a significant impact on their finances, with an increase of 145.11% year-on-year (Illustrative image Infobae)
Rental contracts formalized before the implementation of Javier Milei 's DNU remain in force and, for the most part, are adjusted annually. Next February this increase will have a new record, with an increase of 147.11% . Those tenants who paid $100,000 for a three-bedroom apartment until now will have to allocate $247,110 per month until January 2025.
These adjustments in the rental cost are determined by the Lease Contract Index (ICL), prepared by the Central Bank. Despite the repeal of the regulations created in June 2020, they are still valid for previously signed contracts.
The ICL, in turn, is constructed considering two variables: inflation and salaries. Regarding inflation, the conventional Consumer Price Index (CPI) is used, published monthly by the National Institute of Statistics and Censuses (Indec). Regarding salaries, the Average Taxable Remuneration of Stable Workers (Ripte) is taken into account.
Alejandro Braña , a Real Estate expert and member of the Buenos Aires Real Estate Professional College, stressed to Infobae that “both maintain an inertia that shows no signs of stopping in the immediate future. This means that the adjustments in contracts signed until October 17 (date of the law reform, now repealed) continue to experience significant increases. In fact, it is projected that after February 16, the increase will reach 158% year-on-year.”
These figures were calculated using data from November 2023. Therefore, the next adjustment will reflect the highest inflation in recent decades, which was 25.5% last month. This implies that the value will continue to rise for those who must recalculate their price year-on-year next March.
Based on the ICL, the increase in rents for contracts updated on February 1, 2024 will be 147.11%, a percentage that exceeds the 137.5% registered in January. This increase consolidates the trend of triple-digit increases, a situation that is difficult to reverse until inflation decreases drastically.
How to calculate it
To calculate the new rental amount starting in February, it is necessary to multiply the previous amount until this month by the corresponding coefficient, according to the contract update date.Applying the adjustment, based on the ICL, involves consulting the index on the BCRA's official website, accessing the Statistics tab and then Main Variables. Another alternative is to use the calculator available on the portal of the Buenos Aires Real Estate Professional Association.
You can also calculate the increase through the official website of the City Housing Institute (IVC)
In both options you must enter the date on which the contract was signed, to know what the index was at that time; select the contract update date and indicate the initial contract amount without points to separate the tens of thousands.
The user must select the start and end dates of the period they want to consult: as an example, if the contract for $100,000 (for a 3-room apartment in CABA) must be adjusted on February 1, from that week on it will go to pay $247,110 per month and the increase represents an increase of 147.11% year-on-year.
Current outlook
Since the repeal of the Rental Law on December 29, the real estate supply has experienced constant growth. Currently, more than 8,000 properties are available on specialized portals, with payment options in both pesos and dollars.Agreements continue to be made through the ICL, although now with quarterly or four-monthly adjustments and with a maximum duration of two years, in contrast to the three years stipulated by the repealed law.
“In our case, all agreements so far include adjustments for ICL, and we recommend considering it as a beneficial, especially equitable, alternative. However, with the current DNU in force, which grants complete freedom to the parties, there are no longer rigid contract models or uniform conditions that are repeated in all locations. Everything will depend on the profile of the tenant, either in terms of the industry or activity in which he is located,” commented Braña.
Regarding supply, as has never happened in the last 4 years, there is a very strong recovery in supply and in some portals it exceeds 40% year-on-year.
Mariano Lo Valvo, from a real estate company that operates in the northern area of Buenos Aires, pointed out “that the initial reactions indicated that many owners, previously withdrawn from the market, expressed their interest in returning their properties to the inventory.”
In Coghlan there are now more than 20 units in pesos (when more than 60 days ago there were only options in dollars). For example, a 3-room apartment on Melián at 3200 of 60 square meters is rented for $320,000 per month.
A studio apartment in Yatay and Ángel Gallardo, in Almagro, is offered for $120,000 with a semiannual adjustment by ICL. And a furnished 2-bedroom in Parque Patricios (Caseros at 2400) has a value of $290,000 with quarterly adjustment by ICL. And a three-bedroom, in Barrio General Savio, in Villa Lugano, has an initial price of $120,000 with quarterly adjustment by ICL.
Lo Valvo concluded: “Proposals with a duration of 2 years predominate, with quarterly adjustments in some cases and every 4 months in others. The big question is whether these adjustments are viable for tenants, considering that salaries are not adjusting at the same rate as inflation. In addition, January, due to the holiday effect, is historically characterized as a month of low activity in the real estate market.”
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