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Rents without brakes: How much will the November increase be and how to calculate it - Infobae
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www.infobae.com
October 25, 2023
Contracts established in accordance with the legislation enacted in June 2020 undergo annual adjustments. In contrast, those signed after the law reform will be updated through the Casa Propia formula every six months
By José Luis Cieri
Rental prices are increasing strongly month after month in Argentina (Illustrative image Infobae)
The rental market remains in extreme tension despite the changes voted by Congress, in the midst of growing macroeconomic instability and inflation. Starting in November, those tenants who signed leases in the same month last year will face an increase of nearly 120 percent.
For those who entered into housing rental contracts one or two years ago, which are updated annually through the Rental Contract Index (ICL), these contracts remain in force until their expiration.
Increases in the value of rents are determined based on the ICL, which is prepared by the Central Bank and considers two variables: Indec inflation and the Average Taxable Remuneration of Stable Workers (Ripte).
If, for example, the agreement was made for $110,000 per month and the contract is updated next month, starting in November and for one year, the rental value will amount to $241,444. More than double.
To apply the adjustment based on the ICL, the index can be consulted on the official BCRA website, 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 site (cabaprop.com.ar).
There are several ways to calculate the year-on-year rent increase (Photo: Getty)
The user must select the start and end dates of the period they want to consult: as an example, if the contract for $110,000 (for a 2-bedroom apartment in CABA) expires next November 1, starting next week it will expire to pay $241,444 per month and the increase represents an increase of 119.5% year-on-year.
In CABA it is estimated that around 13,000 contracts will expire in November (signed in October 2020). However, doubts arose because it is estimated that a large percentage of them will not be renewed and will only be prolonged, as long as there is agreement between the parties.
According to Alejandro Braña , a Real Estate expert and member of the Real Estate Professional Association (CPI), the situation is disconcerting. “It is incomprehensible that the senators and deputies of the ruling party have resisted the rule. They introduced changes that, instead of improving the situation of tenants and owners, have the opposite effect. As a result, many owners withdrew their properties from the market. We were already facing a limited supply of 400 properties in CABA and now we are inexorably moving towards a zero supply,” he explained.
The challenge of accessing adequate housing is a widespread problem, with cities where real estate agencies offer fewer than 40 traditional rental properties. This situation often creates complex negotiations between the parties involved in signing a contract.
Mauricio Retamar , from the Entrerrianos Tenants Association, told Infobae that “the semiannual adjustment was a request from the owners and was implemented that way in the reform of the law. The tax reduction was also a request from the owners and was carried out. This has increased profitability as it involves fewer expenses over time. In my opinion, the semi-annual update makes the rental option more attractive.”
Like other entities that represent tenants, they maintain that the State has a constitutional obligation to address access to housing in a comprehensive manner.
“This also implies establishing conditions that limit the supply of temporary apartments, implementing mortgage credit policies and creating an agency in charge of supervising Social Rental, among other alternatives,” concluded Retamar.
www.buysellba.com
Source:
Alquileres sin freno: de cuánto será el aumento de noviembre y cómo calcularlo
Los contratos establecidos conforme a la legislación sancionada en junio de 2020 experimentan ajustes anuales. En contraste, los firmados después de la reforma de la ley se actualizarán a través de la fórmula Casa Propia cada seis meses
www.infobae.com
October 25, 2023
Contracts established in accordance with the legislation enacted in June 2020 undergo annual adjustments. In contrast, those signed after the law reform will be updated through the Casa Propia formula every six months
By José Luis Cieri
Rental prices are increasing strongly month after month in Argentina (Illustrative image Infobae)
The rental market remains in extreme tension despite the changes voted by Congress, in the midst of growing macroeconomic instability and inflation. Starting in November, those tenants who signed leases in the same month last year will face an increase of nearly 120 percent.
For those who entered into housing rental contracts one or two years ago, which are updated annually through the Rental Contract Index (ICL), these contracts remain in force until their expiration.
Increases in the value of rents are determined based on the ICL, which is prepared by the Central Bank and considers two variables: Indec inflation and the Average Taxable Remuneration of Stable Workers (Ripte).
Rising
As stated, based on the LCI, the increase in rents for contracts that renew on November 1, 2023 amounts to 119.5% year-on-year. This percentage exceeds the 115.3% registered in October and confirms a three-digit trend.If, for example, the agreement was made for $110,000 per month and the contract is updated next month, starting in November and for one year, the rental value will amount to $241,444. More than double.
How to calculate it
To know how much rent must be paid from the month of November, you must multiply the rent amount up to this month by the corresponding coefficient, depending on the contract update date.To apply the adjustment based on the ICL, the index can be consulted on the official BCRA website, 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 site (cabaprop.com.ar).
In both, you must enter the date on which the contract was signed, to know what the index was at that time; select the contract update date and indicate the initial contract amount without points to separate the tens of thousands.
There are several ways to calculate the year-on-year rent increase (Photo: Getty)
The user must select the start and end dates of the period they want to consult: as an example, if the contract for $110,000 (for a 2-bedroom apartment in CABA) expires next November 1, starting next week it will expire to pay $241,444 per month and the increase represents an increase of 119.5% year-on-year.
Reformed law
With the recent reform of the Rental Law sanctioned in 2020, the new contracts (also three years) that are signed from now on will be adjusted semiannually using the Casa Propia coefficient, published by the Ministry of Territorial Development and Habitat of the nation.In CABA it is estimated that around 13,000 contracts will expire in November (signed in October 2020). However, doubts arose because it is estimated that a large percentage of them will not be renewed and will only be prolonged, as long as there is agreement between the parties.
According to Alejandro Braña , a Real Estate expert and member of the Real Estate Professional Association (CPI), the situation is disconcerting. “It is incomprehensible that the senators and deputies of the ruling party have resisted the rule. They introduced changes that, instead of improving the situation of tenants and owners, have the opposite effect. As a result, many owners withdrew their properties from the market. We were already facing a limited supply of 400 properties in CABA and now we are inexorably moving towards a zero supply,” he explained.
The challenge of accessing adequate housing is a widespread problem, with cities where real estate agencies offer fewer than 40 traditional rental properties. This situation often creates complex negotiations between the parties involved in signing a contract.
Mauricio Retamar , from the Entrerrianos Tenants Association, told Infobae that “the semiannual adjustment was a request from the owners and was implemented that way in the reform of the law. The tax reduction was also a request from the owners and was carried out. This has increased profitability as it involves fewer expenses over time. In my opinion, the semi-annual update makes the rental option more attractive.”
Like other entities that represent tenants, they maintain that the State has a constitutional obligation to address access to housing in a comprehensive manner.
“This also implies establishing conditions that limit the supply of temporary apartments, implementing mortgage credit policies and creating an agency in charge of supervising Social Rental, among other alternatives,” concluded Retamar.
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