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Rentals: How much did prices rise in September? - La Nacion Propiedades
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Alquileres: ¿cuánto subieron los precios en septiembre?
Un informe relevó el incremento de los departamentos que se ofrecen en las plataformas digitales
www.lanacion.com.ar
October 01, 2024
A report revealed the increase in apartments offered on digital platforms
The September increase affects the pockets of tenants because the prices in publications increased more than inflation Fabian Marelli
Amidst a constantly changing and realigning real estate market and following the repeal of the rental law at the end of last year , listing prices for apartments for rent in the city of Buenos Aires rose above inflation for the second time this year. In numbers, prices in September rose 4.4% compared to the previous month , according to the latest data from Zonaprop , while inflation was 4.2% in August (the last month surveyed).
“The increase in rental prices is related to the evolution of inflation . Although the increase in August is tenths above the inflation calculated by the REM (Market Expectations Survey), currently the price of new contracts is running at the same pace as the CPI (Consumer Price Index) data,” says Leandro Molina, director of the real estate portal. “In addition, although there is a significant demand for rentals, the number of properties available is not sufficient to satisfy that demand. Therefore, pressure is generated on prices that causes them to rise,” he adds.
But it is worth clarifying that, despite this increase above the monthly inflation, in the annual analysis, the increase is below the data collected by INDEC: in 2024 rental prices increased by 52% , half of the inflation recorded in the same period was 102%, which implies a real drop in prices of 50% . In addition, a fact to keep in mind is that small apartments are the units that show the greatest increase in their values.
“ The rental market is still looking for a balance and so far this year the price of listings has fallen in real terms,” says Soledad Balayan, owner of Maure Inmobiliaria.
Those looking for an apartment today find options to rentsirtravelalot - Shutterstock
In this way, the values of the new contracts have accumulated an increase of 124.7% in the last 12 months, advancing below the inflation rate of 236.7% in July 2024 and below the ICL adjustment (244.5%) so far.
It should be noted that these agreements are established in accordance with contractual freedom, following the repeal of the rental law reflected in Javier Milei's DNU on December 29, 2023; while the contracts under it are still in force: those that are updated annually by the Rental Contract Index (ICL) and those that increase every six months by Casa Propia . The latter were closed after the law was updated at the end of October last year.
Federico González Rouco, an economist specializing in housing, referred to the latter: “In recent years, up until December, we had contracts that were adjusted every year based on the ICL, which generated an automatic reaction by the owner to try to cover themselves and, consequently, greatly inflate the initial prices. Today, the scheme is more consistent with the Argentine economic reality : more periodic updates mean that this need for coverage, of putting money into uncertainty, is no longer there .”
Despite the increase above inflation, this scenario is what specialists expected: a context similar to that which occurred between 2013 and 2018, with values that will remain the same month after month , “sometimes they will rise a little and sometimes they will fall, but they are stable numbers,” adds the economist.
How much does it cost to rent in the city of Buenos Aires?
In concrete numbers, the average rent for a studio apartment in August was $424,583 per month, while a one-bedroom apartment costs $507,422 and two-bedroom apartments are offered for an average of $682,714 per month .
As for the values by neighborhood, with reference prices for a one-bedroom apartment, they are ordered as follows:
The 5 most expensive neighborhoods to rent
- Puerto Madero: $1,047,664
- Nuñez: $570,317
- Palermo: $569,212
- Belgrano: $552,763
- Parque Chas: $544,695
The 5 cheapest neighborhoods to rent
- Lugano: $357,256
- Liniers: $427,766
- La Boca: $437,152
- Parque Avellaneda: $438,368
- Floresta: $440,749
For their part, areas such as Parque Chas ($506,228), Paternal ($478,392), Villa Devoto ($464,595), Villa Luro ($455,760) and Monte Castro ($439,878), are positioned as the neighborhoods with publication of rents with values in the middle zone .
Palermo is one of the most expensive neighborhoods to rent in the city of Buenos Aires Fabian Marelli - THE NATION
How much will rental contracts increase in October?
For the second time in more than four years , tenants who signed their contracts in October 2022 and 2023, under the law repealed - by the Decree of Necessity and Urgency (DNU) signed by President Javier Milei - at the end of last year, will receive a slight respite in the adjustments to their rents.It should be clarified that these agreements are those that were agreed upon under the regulations (before the update at the end of October 2024), which govern for a period of three years and continue to be regulated by the previous conditions : the adjustment is annual based on the Lease Contracts Index (ICL) , prepared by the Central Bank.
Since it came into effect, the ICL has been characterized by a constant increase , driven by high inflation. However, last month brought a change of trend and for the first time in more than 50 months, the increase in the adjustment governing contracts that are still under the law, now repealed, slowed down. A situation that will be repeated in October .
Thus, in the tenth month of the year , the contracts agreed in October 2022 and 2023 will have a year-on-year increase of 237.9% (as of October 1, 2024), according to the latest ICL update , around 5% less than those that had to be updated in September (243.16%).
In concrete numbers, if a tenant pays $200,000 in rent, starting next month and for the next 12 months he or she will have to pay $675,801, while the one who pays $400,000 will pay $1,351,601 per month. A key fact to keep in mind is that the ICL varies daily , so the increase will depend on the day of the month in which the contract was signed to apply the corresponding adjustment.
It should be noted that the contracts signed between October 18 and December 29, 2023 were agreed upon under the modification of the law in force at that time under the Casa Propia coefficient . These will only receive their second update starting October 18, 2024.
While those that were agreed upon after the repeal of the regulations , that is, under contractual freedom , will do so depending on the form chosen both in the update period and in the chosen index.
Specialists say that most contracts are agreed for two years and with quarterly adjustment using the Consumer Price Index (CPI) that INDEC reveals month by month. In this case, the rents that will be adjusted in October will be those signed on July 1, 2024 and the increase will be 13.33% , according to the accumulated inflation in that period.
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