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Rents are rising again and there will be a new record in March prices: How to calculate the increase - Infobae
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Otra vez suben los alquileres y habrá un nuevo récord en los precios de marzo: cómo calcular el aumento
Los contratos bajo la derogada Ley de Alquileres, que aún están en vigor y se ajustan anualmente según el Índice de Contratos de Locación (ICL), registrarán un fuerte incremento
www.infobae.com
February 20, 2024
Contracts under the repealed Rental Law, which are still in force and are adjusted annually according to the Rental Contract Index (ICL), will register a strong increase
By José Luis Cieri
Rents adjusted by ICL will suffer an unprecedented increase. Tenants will have to make a great effort to pay the costs of maintaining the home (Illustrative Image Infobae)
The rental contracts established prior to the application of the Government's DNU remain valid and, for the most part, undergo annual adjustments. Next March, an unprecedented increase of 165.50% is anticipated, marking a new record. This implies that those tenants who paid $100,000 for a three-room apartment will now have to allocate $265,500 per month until February 2025.
A notable increase that will generate a strong impact on the pockets of those who maintain contracts under the previous legislation.
These adjustments in the rental cost are determined by the Lease Contract Index (ICL), whose preparation is in charge of the Central Bank. Despite the repeal of the regulations created in June 2020, they are still valid for contracts already signed.
The ICL is constructed considering two crucial variables: inflation and wages. 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, Real Estate expert and member of the Real Estate Professional College, shared with Infobae his perspective on inflationary inertia in the sector. He noted that both the LCI and the Consumer Price Index (CPI) experienced an unprecedented rise in the last two months. “The latest report reveals an increase of 165.50% by March 1, 2024 and a staggering 187.83% by March 16, based on data collected in December 2023. This last month recorded the highest inflation rate high in more than three decades.”
The expert projects that the upward trend in these indices, which update rents since July 2020, could only begin to moderate in the second half of this year.
How to estimate it
To calculate the new rental amount starting in March, the previous amount up to this month must be multiplied by the corresponding coefficient, according to the contract update date.To make the adjustment based on the ICL, the index can be accessed on the BCRA's official website. Simply go to 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. Both options require entering the date the contract was signed, selecting the contract update date, and indicating the initial contract amount without points to separate the tens of thousands.
For both options, it is essential to enter the date the contract was signed to determine the rate at that time. Then, you must select the contract update date and indicate the initial contract amount without points to separate the tens of thousands. The user must specify the start and end dates of the period they wish to consult.
In just a few clicks you can find out the rent increase next March (Getty)
How does the scenario continue?
After the repeal of the Rental Law and since last January, the supply has doubled in the City of Buenos Aires.According to surveys by the Federal Council of Real Estate Associations (CoFeCI) and the Real Estate Federation of the Argentine Republic (FIRA) carried out among real estate brokers and auctioneers throughout the country, the majority of rental contracts for homes are made in pesos, with a duration of 24 months, quarterly adjustments and using the ICL.
“I suggest using the ICL in all contracts, and from our perspective in the sector, we recommend considering it as a beneficial option, especially equitable. However, with the current validity of the DNU, which grants total freedom to the parties, there are no longer rigid contract models or uniform conditions that are repeated in all locations. The choice will depend on the tenant's profile, such as their employment sector, employment in a dependency relationship or independent work, among other aspects,” said Braña.
Contracts prior to the implementation of the DNU are adjusted according to the conditions agreed at the time and cannot be modified without consensus.
Diego Migliorisi , of Migliorisi Propiedades, said: “In contrast, contracts entered into after the DNU usually undergo quarterly or quarterly updates. And the most important thing is that the supply of rental properties increased by approximately 60%.”
For the sector, it is the best news they received in the rental market in this long and very deep crisis that has been going on for almost 4 years.
Braña highlighted: “This evolution is totally coherent when considering that we went from having a little less than 500 properties available, for example, in CABA in November/December 2023, to currently exceeding 11,000, covering apartments, townhouses and houses intended for housing. familiar. We observe a downward correction in the values of publications that do not generate a response after a couple of weeks, and tenants, who before the DNU hurriedly reserved any option, now present offers below the advertised and requested prices.”
Tips and values
In the area of Palermo, Villa Crespo and its surroundings, current rental prices start at $220,000 per month for one-bedroom units, $350,000 for two-bedroom units and $450,000 for three-bedroom units.Migliorisi suggested that, to adjust rents, the tenant's salary variation could be considered. However, he noted that “many owners prefer to use the Consumer Price Index (CPI) or, failing that, the ICL. When inflation decreases, the entire adjustment process will be easier.”
As for demand, it is at very high levels as has been happening for a long time, but very selective because now the supply is diversified and varied.
Other examples of current prices are the following: studio apartment in Almagro (Yatay and Ángel Gallardo) $120,000 with semiannual adjustment by ICL; studio apartment in Recoleta (Talcahuano and Av. Santa Fe) $130,000 with semiannual adjustment by ICL; two furnished rooms, in Parque Patricios (Av. Caseros at 2400) $290,000 with quarterly adjustment by ICL; two rooms in Mataderos (Monte and Albariño) PH with patio and terrace $150,000 with quarterly adjustment by ICL; two rooms in La Paternal (Juan B. Justo and San Martín Avenues) $135,000 with quarterly adjustment by ICL; three rooms in Monte Castro (Bermúdez and Álvarez Jonte), PH on the ground floor with patio and terrace $350,000 with quarterly adjustment by ICL and three rooms in Bº Gral. Savio (Villa Lugano), initial rent $120,000 with quarterly adjustment by ICL.
“My advice to tenants is to select rental contracts with adjustments that they can comply with according to the agreed periodicity, whether every 3, 4 or 6 months. Furthermore, consider that the current abundance of opportunities gives you the possibility of being more selective regarding the type of property and its value. It is not necessary to despair, since the market offers greater options to make informed decisions,” concluded Braña.
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