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Rentals: Very few contracts with the new adjustment method - Infobae
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www.infobae.com
November 04, 2023
Rentals: The shortage of supply remains and there are very few contracts with the new adjustment method
Two update formulas coexist, the Rental Contract Index for previous agreements and the Casa Propia for current ones. The latter favors tenants, but for now values continue to rise
By José Luis Cieri
Representative scene of buying, renting, acquiring, renting, leasing a property, house, apartment, home, home. Rent increase, rental law, living in the city (Illustrative image Infobae)
For three weeks now, new rental contracts have been subject to the Casa Propia coefficient for its semiannual update. Meanwhile, those who maintain previous contracts must continue using the Rental Contract Index (ICL) of the Rental Law enacted in June 2020. This month marks the beginning of the coexistence of both types of agreements.
From the real estate sector they assured that Casa Propia benefits tenants, but for now it is not able to seduce owners to offer their properties again for long-term contracts.
The mechanism is based on the lowest indicator between the average inflation of the last year and 90% of the salary variation in that period. In contrast, the ICL is composed in equal parts of the monthly variations of the consumer price index (CPI) and the average taxable remuneration of stable workers (Ripte). For those who had to update the amount this month, the increase was 119.5% year-on-year.
Iván Ginevra , president of the Argentine Real Estate Chamber, told Infobae that the purpose of the original law was to promote greater availability of rentals in local currency. “However, it had the opposite effect, since the supply of rentals in pesos was significantly reduced, and prices increased above inflationary indices. This outcome was predictable and was the subject of prior warnings,” stressed Ginevra, who called for the law to be repealed.
Both in CABA and in the province of Buenos Aires, few contracts are being concluded with owners who considered the tax benefits applied favorable , as reported by Infobae , which encouraged some owners to participate in the rental market.
Some landlords choose to wait for more favorable legislation, while others prefer temporary rentals or renting in an unregulated manner.
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The offer remains ironed, since the reform of the Rental Law came into force, the proposals for rentals in pesos and long-term have not been raised.
Vanesa Ibarra , from Salguero Propiedades, said that “access to housing in CABA became a considerable challenge for the working middle class due to high rental costs. Both studio apartments and apartments with two, three or four rooms are practically inaccessible for those with employee salaries. The existing offer on the market is out of reach of most people.”
A two-room apartment in CABA rents for around $200,000 per month, while a new one in a building with amenities can reach $250,000 plus expenses, which is around 40,000 pesos. On the other hand, the few three-bedroom apartments start at $350,000 per month and increase week after week.
“The key to finding a solution and restoring normality lies in listening to the owner sector. There is a reluctance to commit to three-year contracts and to use adjustment indices that do not reflect true inflation. A more flexible approach is needed that allows tenants and owners to achieve a sustainable balance in the market,” Ibarra said.
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Signing a rental contract under current regulations is not easy in Argentina (Photo: Getty)
Mirta Líbera , president of the Real Estate Chamber of the Province of Buenos Aires (CIBA), expressed her concern: “The situation is critical. We observe an increase in informality and direct agreements between owners and tenants, outside the law. Since housing seekers lack alternatives, they are often forced to accept abusive conditions, such as increases before the deadline stipulated by the recently reformed law, which stipulates semiannual reviews.
In terms of prices, the limited supply puts strong pressure on the initial values of the contracts currently being concluded.
“The contracts that are being signed present remarkably high figures. For example, in La Plata, a studio apartment can be rented for more than $150,000 per month. There is evident stagnation, and many owners are waiting for the results of the ballot and the next mandate that will begin next December,” said Líbera.
The result of the law reform was greater informality in the market, greater incentives to convert properties to temporary rentals, and a generalized reduction in supply.
“There is no good in the Argentine economy that can last 6 months with the price frozen in pesos. The damage they are causing to the tenants is inexplicable and could have been avoided,” Ginevra added.
Tenant groups denounce speculation by the real estate sector.
“There are also queries and complaints that we receive from tenants who report pressure on families to increase rental values, sign extensions and illegal contracts, and even accept deposits and rents in dollars,” concluded Ranzuglia.
www.buysellba.com
Source:
Alquileres: se mantiene la escasez de oferta y hay muy pocos contratos con el nuevo método de ajuste
Conviven dos fórmulas de actualización, el Índice de Contrato de Locación para acuerdos anteriores y el Casa Propia para los actuales. Este último favorece a inquilinos, pero por ahora los valores siguen en alza
www.infobae.com
November 04, 2023
Rentals: The shortage of supply remains and there are very few contracts with the new adjustment method
Two update formulas coexist, the Rental Contract Index for previous agreements and the Casa Propia for current ones. The latter favors tenants, but for now values continue to rise
By José Luis Cieri
Representative scene of buying, renting, acquiring, renting, leasing a property, house, apartment, home, home. Rent increase, rental law, living in the city (Illustrative image Infobae)
For three weeks now, new rental contracts have been subject to the Casa Propia coefficient for its semiannual update. Meanwhile, those who maintain previous contracts must continue using the Rental Contract Index (ICL) of the Rental Law enacted in June 2020. This month marks the beginning of the coexistence of both types of agreements.
From the real estate sector they assured that Casa Propia benefits tenants, but for now it is not able to seduce owners to offer their properties again for long-term contracts.
The mechanism is based on the lowest indicator between the average inflation of the last year and 90% of the salary variation in that period. In contrast, the ICL is composed in equal parts of the monthly variations of the consumer price index (CPI) and the average taxable remuneration of stable workers (Ripte). For those who had to update the amount this month, the increase was 119.5% year-on-year.
In the midst of the changes, the shortage of properties available on the market in the city of Buenos Aires and the province of Buenos Aires worsens.
Iván Ginevra , president of the Argentine Real Estate Chamber, told Infobae that the purpose of the original law was to promote greater availability of rentals in local currency. “However, it had the opposite effect, since the supply of rentals in pesos was significantly reduced, and prices increased above inflationary indices. This outcome was predictable and was the subject of prior warnings,” stressed Ginevra, who called for the law to be repealed.
Both in CABA and in the province of Buenos Aires, few contracts are being concluded with owners who considered the tax benefits applied favorable , as reported by Infobae , which encouraged some owners to participate in the rental market.
Some landlords choose to wait for more favorable legislation, while others prefer temporary rentals or renting in an unregulated manner.
The offer remains ironed, since the reform of the Rental Law came into force, the proposals for rentals in pesos and long-term have not been raised.
Vanesa Ibarra , from Salguero Propiedades, said that “access to housing in CABA became a considerable challenge for the working middle class due to high rental costs. Both studio apartments and apartments with two, three or four rooms are practically inaccessible for those with employee salaries. The existing offer on the market is out of reach of most people.”
A two-room apartment in CABA rents for around $200,000 per month, while a new one in a building with amenities can reach $250,000 plus expenses, which is around 40,000 pesos. On the other hand, the few three-bedroom apartments start at $350,000 per month and increase week after week.
“The key to finding a solution and restoring normality lies in listening to the owner sector. There is a reluctance to commit to three-year contracts and to use adjustment indices that do not reflect true inflation. A more flexible approach is needed that allows tenants and owners to achieve a sustainable balance in the market,” Ibarra said.
Informality first
In certain regions of the province of Buenos Aires, such as Junín, Bahía Blanca, La Plata and Mar del Plata, all with a population of more than 150,000 inhabitants, there are fewer than 50 long-term lease contracts.
Signing a rental contract under current regulations is not easy in Argentina (Photo: Getty)
Mirta Líbera , president of the Real Estate Chamber of the Province of Buenos Aires (CIBA), expressed her concern: “The situation is critical. We observe an increase in informality and direct agreements between owners and tenants, outside the law. Since housing seekers lack alternatives, they are often forced to accept abusive conditions, such as increases before the deadline stipulated by the recently reformed law, which stipulates semiannual reviews.
In terms of prices, the limited supply puts strong pressure on the initial values of the contracts currently being concluded.
“The contracts that are being signed present remarkably high figures. For example, in La Plata, a studio apartment can be rented for more than $150,000 per month. There is evident stagnation, and many owners are waiting for the results of the ballot and the next mandate that will begin next December,” said Líbera.
The result of the law reform was greater informality in the market, greater incentives to convert properties to temporary rentals, and a generalized reduction in supply.
“There is no good in the Argentine economy that can last 6 months with the price frozen in pesos. The damage they are causing to the tenants is inexplicable and could have been avoided,” Ginevra added.
The other part
Natalia Ranzuglia , member of Inquilinxs Tres de Febrero Buenos Aires Tenant Network and the National Tenant Movement, emphasized that, despite numerous obstacles, they managed to have their proposals in the national Congress considered in the regulation of rents. However, he warned that “all this effort could be in vain if an enforcement authority is not appointed and if the fundamental issue is not immediately addressed: guaranteeing access to housing, whether through ownership, rental or other modalities, it is a responsibility that the State must assume at the national, provincial and municipal levels. “The creation of a space for dialogue in this sense becomes essential.”Tenant groups denounce speculation by the real estate sector.
“There are also queries and complaints that we receive from tenants who report pressure on families to increase rental values, sign extensions and illegal contracts, and even accept deposits and rents in dollars,” concluded Ranzuglia.
www.buysellba.com
