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The dramatic rental situation in the provinces: there is a shortage and scams on desperate tenants are growing
November 13, 2023There is an increase in contracts and extensions with increases of more than 200 percent year-on-year. Few agreements for the Casa Propia index. From the sector they warn to avoid deception.
Renting a home in pesos and for a three-year contract as required by law is not easy. Properties are scarce throughout the country and increases of more than 200% year-on-year are recorded (Illustrative image Infobae).
In the City of Buenos Aires, getting housing at reasonable prices is almost impossible and the same is happening in the interior of the country, where access to a roof through rent in pesos becomes increasingly dramatic. Currently, in most provinces, new contracts or extensions of agreements usually increase by more than 200% year-on-year, extremely complicating the economic equation of each budget of tenants and families looking to rent.
Rental values far exceed the Lease Contract Index (ICL), which marked 119.5% for November, applicable to agreements signed a year ago. Despite the recent reform of the Rental Law, new contracts, with a duration of three years and adjustable every six months by the Own Home coefficient, are still scarce.
Emilio Caravaca Pazos, president of the Real Estate Federation of the Argentine Republic (FIRA), indicated a Infobae that “every change requires adaptation. Although the law was reformed, the supply of housing remains limited. The solution lies not only in current legislation, but in the implementation of pending measures. Until now, the Home Own coefficient adjusts below other indices, contributing to the initial increase in rents due to inflation.”
In the midst of the rental access crisis, scams arise among tenants who, desperate to find housing, avoid real estate agencies and fall into deception by resorting to fraudulent publications on social networks. Non-existent houses are often offered there at lower prices than usual. They ask for deposits, online payments and bank transfers, which are just scams.
The FIRA provides the following recommendations:
Verification of the real estate broker: It is advisable to work with a real estate broker registered in the corresponding school. Verify enrollment through the institution's website or through personal or telephone contact.
Contact through official channels: You must communicate exclusively through the company's official channels. Phone numbers and emails must be verified.
Precautions in bank transfers: Bank transfers or deposits as a reservation should be avoided without having physically visited the property. The conditions must be agreed by means of a document.
Buenos Aires
In cities such as Mar del Plata, Bahía Blanca, La Plata and other towns in the province of Buenos Aires, such as Mercedes, Bragado, Junín, among others, the situation is also critical due to the shortage of units in traditional locations.
In Mar del Plata, as in other large Buenos Aires cities, the offer is limited, there are less than 100 apartments and less than 50 houses with proposals in pesos.
“The Rental Law has been in operation for 41 months and, after the recent reform, the supply decreased: at this time it is almost non-existent. Although demand is pressing, orders cannot be satisfied,” Luis Colao, treasurer of the Public College of Auctioneers and Brokers of the Province of Buenos Aires, told Infobae Aires.
In some locations, the supply of rental housing is very limited, with less than 100 apartments and less than 50 houses with garage available. In intermediate cities (less than 70,000 inhabitants), the average rent for a three-bedroom house, located outside the center, is around $100,000 per month.
Colao added: “In cities like Mercedes there is not so much conflict in terms of possible scams, there is no dollarization like in CABA. Positive relationships often develop between property owners and tenants, which leads to the extension of agreements or their renewal.”
On the other hand, in Mar del Plata, specifically in the Sarmiento neighborhood, 35 blocks from the center, the monthly request for a 3-room apartment amounts to $250,000, plus $35,000 for expenses.
Cordoba
In the city of Córdoba there is also a pronounced decrease in supply. According to the Real Estate Statistics Center (CEI) of the Professional Association of Real Estate Agents (CPI), provided by the Economic Trends agency, between May 2021 and last October, the supply of traditional rental homes fell by 38.9%.
This decrease is attributed to the decision of owners to withdraw units from the rental market to put them up for sale, motivated by their disagreement with the law and its modifications.
Source: Center for Real Estate Statistics (CEI) of the Professional College of Real Estate Agents (CPI) of Córdoba, provided by the Economic Trends agency.
Alejandro Hadrowa, president of the Professional Association of Public Real Estate Brokers (CPI) of Córdoba, told Infobae that “the impact continues to be unfavorable, since many owners perceive that Casa Propia aggravates the situation. Furthermore, given the uncertainty generated by the presidential runoff, the current trend is leaning towards the renewal of existing contracts.”
A two-room apartment has a value range that fluctuates between $150,000 and $250,000 per month, especially if they are located in buildings that offer additional services (amenities).
“Three-room apartments have rates that start at $200,000 and can reach $400,000 or even more per month, depending on factors such as the presence of garages, location and the services that the residential complex provides to its residents,” Hadrowa explained.
Three-room apartment in Córdoba capital starts at $200,000 and can go up to more than $400,000 per month.
Paralysis
Since the law reform came into effect on October 18, the sector has been paralyzed in Rosario, the third city in the country. And the values in pesos experience a constant increase, maintaining the imbalance in the contractual relationship.
“In Rosario, reports of scams against tenants are frequent, especially through the presentation of false properties at tempting prices through social networks. They prey on those who need to find housing. To avoid falling into these traps, you must always contact a registered broker,” commented César Fernández Cívico, treasurer of the Federal Council of Real Estate Associations of Argentina.
In Rosario, as in the rest of Argentina, rent is the only service that is updated twice a year, and the low supply continues to be a current problem, causing harm to tenants.
Regarding the offer in Rosario, the values of 2 and 3-room apartments, as well as three-room houses, vary depending on the location and the quality of services. In the city center, a 2-room apartment starts at $100,000, while 3-room apartments start at $150,000 per month.
In Posadas informality grew, there are contracts that are concluded directly between property owners and tenants, evading real estate companies.
“The supply of housing in traditional locations is about 700 units, according to data from the Propia portal that belongs to the local school,” added Fernández Cívico.
Northwest
Misiones did not have significant impacts after the changes in Congress. Jorge Ferreira, president of the local Real Estate Chamber (CIM), highlighted Infobae that “stability prevailed without notable variations in the behavior of the sector, maintaining the trend since the implementation of the law since June 2020.”
The 2-room apartments in the downtown area of Posadas range between $100,000 and $150,000, while the 3-room apartments vary between $200,000 and $250,000 per month. The 3-room houses in the center have a price ranging between $300,000 and $350,000 per month.
“The supply of real estate cannot meet the housing demand. Several owners chose to negotiate directly with the tenants, avoiding the demands and requirements of the new law, a problem that the current modification does not solve,” Ferreira said.
Patagonia
In Puerto Madryn, as in other cities in the province of Chubut, the law reform was awaited and according to experts the most substantial thing is the possibility of indexing every 6 months, considering it as a way to counteract inflation.
“With various economic activities, such as tourism, fishing, real estate developments and wind companies, among others, the law impacted prices, but a drop in supply was not observed. Legal certainty allowed us to adapt to the new framework and avoid market paralysis,” Laura Zucheli, president of the College of Public Real Estate Brokers of Chubut, acknowledged to Infobae.
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