Apartment Rental Rents: how much will they increase in November according to the update index of each contract - La Nacion Propiedades

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Rents: how much will they increase in November according to the update index of each contract - La Nacion Propiedades



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Alquileres: cuánto aumentarán en noviembre según el índice de actualización de cada contrato

La derogación de la ley de alquileres generó que en la actualidad convivan tres tipos de contratos a la vez; de cuánto será el aumento de cada uno en noviembre

www.lanacion.com.ar

October 29, 2024


The repeal of the rental law has meant that three types of contracts currently exist at the same time; how much will each one increase in November?

In November, rental contracts signed with adjustments by ICL, IPC and Casa Propia will have different increasesRawpixel.com - Shutterstock



For the second time this year, three types of rental contracts will be updated at the same time in November : those signed under the Rental Contract Index (ICL) of the now repealed law, those signed with the change in said law under the Casa Propia coefficient and those agreed upon for contractual freedom after the repeal of the rental law . It should be noted that each type of contract was agreed upon in accordance with the regulations in force on the date it was signed.

In this way, there are contracts agreed upon with annual adjustment by ICL, prepared by the Central Bank, under the rental law that govern for a period of three years and continue to be regulated by the previous conditions.

Since it came into force in July 2020, the ICL has been characterized by a constant increase , driven by high inflation. However, since September, a change in trend has been evident , after which the increase in the adjustment for which rental agreements must increase has slowed down.

Adjustment by ICL​

In this way, on November 1 , the contracts signed in the same month of 2022 will have a second year-on-year increase of 227.14% , according to the latest ICL update , around 4.5% less than those who had to update in October (237.9%). In concrete numbers, if a tenant pays a rent of $200,000, starting next month and for the next 12 they will have to pay $654,276, while the one who pays $400,000 will pay $1,308,553 per month. A key fact to keep in mind is that the ICL varies on a daily basis , so the increase will depend on the day of the month in which the contract was signed to apply the corresponding adjustment.

On November 1, contracts agreed under the ICL update will have a final increase of 227.14%

Adjustment for Own Home​

It is worth noting that in November the rental agreements that were agreed upon under the update of the law in 2023 will also be adjusted - from October 17 to December 29, 2023, this index was in force. These are adjusted on a semi-annual basis and based on the Casa Propia coefficient , which in November will be 68.51%.

For example, in November 2023, the average rent for a two-room apartment in the City of Buenos Aires was $282,389, according to Zonaprop. If that tenant had started the contract on November 1, 2023 under the law , on May 1, 2024, he or she began paying the first updated increase for Casa Propia of $430,476, while in the second update the value will be $725,388.

Adjustments after the repeal of the rental law​

A separate analysis is required for those who closed their rental agreement after the repeal of the regulations, that is, after December 29, 2023. In these cases, the situation is different: freedom was established between the parties when defining the index and the term of the contract and the adjustment. In any case, most of the negotiations were closed with quarterly updates based on the Consumer Price Index (CPI) , which is directly adjusted for inflation : in this case, the increase compared to July will be 12.13%.

For example , if a quarterly adjustment was agreed upon , for a rent of $400,000 started in August 2024, which must be adjusted in November, the last index published by Indec is for September 2024, so the value to be paid would be $448,524 .

“In recent years, up until December, we had contracts that were adjusted every year based on the ICL, which generated the automatic reaction of trying to cover ourselves and, consequently, inflating the initial prices a lot. Today, the scheme is more consistent with the Argentine economic reality: more periodic updates that mean that this need for coverage, of putting money into uncertainty, is no longer there ,” analyzed Federico González Rouco, an economist specializing in housing.

How to calculate the contract increase with ICL​

With an automatic calculator​

There are several websites that have designed calculators to find out the increase in rents . One of them is, for example, the one from the Housing Institute of the City . To consult the index, the steps are as follows:

• Visit the website of the City Housing Institute, which contains a calculator specifically designed to determine the increase in rents : https://vivienda.buenosaires.gob.ar/calculadora_alquiler
• First, you must enter the date on which the contract was signed , to know what the index was at that time.
• Then you must select the contract update date .
• Finally, the user must indicate the initial amount of the contract without points to separate the tens of thousands.

This data will help calculate the amount to be paid during the next year and the percentage of increase that corresponds to that period. In short, the formula that is applied consists of the total rent divided by the index with the date when the contract was signed , multiplied by the index of the day in which the increase is applied to it . The value that this account yields will be the amount of rent that the tenant must pay during the next year , until the new update.

Rental contracts signed under the rental law update (between October 19 and December 29, 2023) will receive an increase of 68.51%Shutterstock

With the BCRA website​

Another option is to consult the official website of the Central Bank , where the entity updates the index on a daily basis. This option does not have an automatic calculation, but must be done manually by the person following these steps:

• Finding the index: Go to the Central Bank website ( bcra.gob.ar ), go to the “statistics” tab and then “main variables”. At the end of the list, in the last option, there is the item that allows you to see the “Lease Contracts Index”. These steps can be shortened by going directly to the shortcut: https://www.bcra.gob.ar/PublicacionesEstadisticas/Principales_variables.asp and searching for “Lease Contracts Index”.
• Define the index value when the contract started and the current value: the user must select the start dates of the contract and the date on which the amount must be updated. Then, he or she must press the blue “consult” button, which will display a table with the index value for all months of the consulted period. In this table, the first value is the index when the contract started and the last is the current index value.
• To find out how much the rent will increase, the following calculation must be done: take the current index and divide it by the index value when the contract began. That figure must be multiplied by the rent value and will result in the amount the tenant will have to pay over the next year until it is updated again.

How to calculate rent increases based on inflation (CPI)​

With an automatic calculator.​

There are multiple options for automatic accumulated inflation calculators on the Internet that take the data published by Indec as a reference. One of them is Chequeado, which will be used as a reference in the following procedure:

• Go to https://chequeado.com/inflacionacumulada/
• Where it says “To buy something that was coming out” enter the rental amount that needs to be updated.
• Where it says “at the beginning of”, enter the month in which the period from which you want to adjust begins. For example, if you wanted to do a quarterly update at the beginning of November, you should consider the period from July to September.
• Where it says “at the end of,” enter the month in which the period from which you want to adjust ends (in this case, September).
• Where it says “you would need the sum of” the new rental value will appear. The result will be the new rental value to be paid for the next quarter.

In other words, the formula would be: rental value x (first month inflation/100 + 1) x (second month inflation/100 + 1) x (third month inflation/100 + 1) = updated rental value.

The result does not always match the calculation made using the automatic calculator ( checado.com ), since the figures published monthly by INDEC are rounded (the number may contain a greater number of decimals, which when considered in the account may vary between 50 and 100 pesos more).

How to calculate the increase in rent with Casa Propia​

As mentioned above, contracts signed under Law 27,737 (in force from October 17, 2023 to December 29, 2023, the date on which it was repealed by Javier Milei's DNU) are updated every six months based on the Casa Propia coefficient . To find out the exact increase, depending on the date on which the agreement was signed, there is a calculator on the internet: arquiler.com . Thus, to make the calculation, the following steps must be followed:

• Visit the website arquiler.com which contains a calculator specifically designed to find out the increase in rents
• First, you must enter the initial amount that was agreed upon for rent when the contract was signed.
• Then you must add the contract start date
• Then you must select how often it is updated (in the case of contracts signed under this law, they are updated every 6 months)
• Finally, the user must choose the update index (in this case, “Casa Propia”)

With this data, it will be possible to calculate the amount to be paid during the next six months and the percentage increase corresponding to that period .

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