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Rents will rise again in October and there will be a new record: how to calculate how much you will have to pay - Infobae
Source:
www.infobae.com
September 28, 2023
The adjustment in rental contracts can be identified through the Lease Contract Index with a few clicks
With just a few clicks you can specify the new value of the monthly rent of the contracts that are adjusted year-on-year through the current Rental Law
Starting in October, tenants who signed rental contracts in the same month of the previous year will face a 115% increase, which could affect the finances of households and those living alone. To calculate the new record amount to pay, there is an index provided by the Central Bank, in accordance with the Rental Law enacted in June 2020, which remains in force while it is reviewed in the national Senate.
To determine the increase in rental contracts, both owners and tenants must consult the Rental Contract Index (ICL) that the Central Bank publishes daily. This index takes into account the variation in inflation, according to the Consumer Price Index (CPI) of INDEC, and salaries, according to the Average Remuneration of Stable Workers (RIPTE).
Alejandro Braña, market analyst and member of the Buenos Aires Real Estate Professional Association (CPI), told Infobae : “The ICL generally lags behind real inflation, since salaries have lost ground in recent years in the face of this economic distortion".
To date, the increase according to the LCI has never reached a level as high as 115%, which sets a new record. However, the agreements that are being established informally far exceed this percentage.
“Currently, few landlords are willing to sign new contracts with the same tenants and choose not to rent again. As an alternative and temporary solution, they propose an extension of 6 or 12 months or a new contract
Another option to anticipate the increase in rent is the portal of the Buenos Aires Real Estate Professional Association (CPI), which offers a calculator on its website: cabaprop.com.ar
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.
There, too, where the prices are calculated, they explain that the formula used is the following and clarify the initials as follows:
VM = VM1 x (ICL / ICL1)
VM = Monthly Value of the year to be calculated
VM1 = Initial Monthly Value of the Contract
ICL = Lease Contract Index as of the update date
ICL1 = Lease Contract Index at the beginning of the contract
First of all, the user must select the start and end dates of the period they want to consult: as an example, if the contract for $90,000 (for a 3-room in CABA) expires on October 1, as of Next week you will pay $193,793 per month and the increase represents an increase of 115.33% year-on-year.
To know how much should be paid when the rental price has to be updated, you just have to follow a few steps from any digital device
This will be the price to pay during the coming months until the new renewal of the value in October 2024.
Until the end of June 2020, before the Rental Law was enacted, the price was defined when the contract was signed, and that total amount was divided by the 24-month duration of the rental and, in general, was agreed with semiannual increases. (according to the National Civil and Commercial Code).
This week there could be progress in the national Congress if the ruling party in the Senate approves the opinion that proposes maintaining three-year agreements with semiannual adjustments, but not through the ICL. Instead, the Casa Propia formula would be used, the coefficient used by the Ministry of Territorial Development for its Procrear lines. This contrasts with the opposition proposal approved in Deputies, which stipulates two-year agreements and adjustments that could be interannual, semiannual or even four-monthly, using another formula that could include the CPI, among other indices.
Alejandro Bennazar, president of the Argentine Real Estate Chamber (CIA), told Infobae : “We have expectations that the Senate will address the reform of the law. However, if the ruling ruling is approved, the issue would return to the Deputies. Therefore, we estimate that the reform would be discussed with the future Government, given that next week the electoral campaign for October 22 will take center stage and there will be no room for new sessions."
From the sector, they indicated that the extensions of contracts that are about to expire continue and that the supply of rentals in Argentina for three-year agreements is scarce.
“Every day it is more difficult to meet demand. In CABA, there are currently less than 400 apartments available for traditional rental,” Bennazar concluded.
www.buysellba.com
Source:
Otra vez subirán los alquileres en octubre y habrá un nuevo récord: cómo calcular cuánto vas a tener que pagar
El ajuste en los contratos de alquiler se puede identificar mediante el Índice de Contratos de Locación con unos pocos clics
www.infobae.com
September 28, 2023
The adjustment in rental contracts can be identified through the Lease Contract Index with a few clicks
With just a few clicks you can specify the new value of the monthly rent of the contracts that are adjusted year-on-year through the current Rental Law
Starting in October, tenants who signed rental contracts in the same month of the previous year will face a 115% increase, which could affect the finances of households and those living alone. To calculate the new record amount to pay, there is an index provided by the Central Bank, in accordance with the Rental Law enacted in June 2020, which remains in force while it is reviewed in the national Senate.
To determine the increase in rental contracts, both owners and tenants must consult the Rental Contract Index (ICL) that the Central Bank publishes daily. This index takes into account the variation in inflation, according to the Consumer Price Index (CPI) of INDEC, and salaries, according to the Average Remuneration of Stable Workers (RIPTE).
Alejandro Braña, market analyst and member of the Buenos Aires Real Estate Professional Association (CPI), told Infobae : “The ICL generally lags behind real inflation, since salaries have lost ground in recent years in the face of this economic distortion".
To date, the increase according to the LCI has never reached a level as high as 115%, which sets a new record. However, the agreements that are being established informally far exceed this percentage.
“Currently, few landlords are willing to sign new contracts with the same tenants and choose not to rent again. As an alternative and temporary solution, they propose an extension of 6 or 12 months or a new contract
The formula for adjustment
To apply the adjustment based on the ICL, a formula is used that takes into account the value of the index on two specific dates: the date of the start of the last update of values and the date on which the increase will be applied. The index can be consulted on the official website of the Central Bank, under the Statistics tab and then in Main variables.Another option to anticipate the increase in rent is the portal of the Buenos Aires Real Estate Professional Association (CPI), which offers a calculator on its website: cabaprop.com.ar
How the calculation is done
First of all, you must enter the date on which the contract was signed, to know what the index was at that timeThen 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.
There, too, where the prices are calculated, they explain that the formula used is the following and clarify the initials as follows:
VM = VM1 x (ICL / ICL1)
VM = Monthly Value of the year to be calculated
VM1 = Initial Monthly Value of the Contract
ICL = Lease Contract Index as of the update date
ICL1 = Lease Contract Index at the beginning of the contract
First of all, the user must select the start and end dates of the period they want to consult: as an example, if the contract for $90,000 (for a 3-room in CABA) expires on October 1, as of Next week you will pay $193,793 per month and the increase represents an increase of 115.33% year-on-year.
To know how much should be paid when the rental price has to be updated, you just have to follow a few steps from any digital device
This will be the price to pay during the coming months until the new renewal of the value in October 2024.
What the Rental Law says
According to the current Rental Law, the minimum term for housing rental contracts is 3 years. In the agreements, the rental price must be set as a single value, for monthly periods and only annual adjustments can be made.Until the end of June 2020, before the Rental Law was enacted, the price was defined when the contract was signed, and that total amount was divided by the 24-month duration of the rental and, in general, was agreed with semiannual increases. (according to the National Civil and Commercial Code).
This week there could be progress in the national Congress if the ruling party in the Senate approves the opinion that proposes maintaining three-year agreements with semiannual adjustments, but not through the ICL. Instead, the Casa Propia formula would be used, the coefficient used by the Ministry of Territorial Development for its Procrear lines. This contrasts with the opposition proposal approved in Deputies, which stipulates two-year agreements and adjustments that could be interannual, semiannual or even four-monthly, using another formula that could include the CPI, among other indices.
Alejandro Bennazar, president of the Argentine Real Estate Chamber (CIA), told Infobae : “We have expectations that the Senate will address the reform of the law. However, if the ruling ruling is approved, the issue would return to the Deputies. Therefore, we estimate that the reform would be discussed with the future Government, given that next week the electoral campaign for October 22 will take center stage and there will be no room for new sessions."
From the sector, they indicated that the extensions of contracts that are about to expire continue and that the supply of rentals in Argentina for three-year agreements is scarce.
“Every day it is more difficult to meet demand. In CABA, there are currently less than 400 apartments available for traditional rental,” Bennazar concluded.
www.buysellba.com
