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End of the rental law. The neighborhoods in which the offer was most activated and the adjustment modality requested by the owners - La Nacion Propiedades
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Fin de la ley de alquileres. Los barrios en los que más se activó la oferta y la modalidad de ajuste que piden los propietarios
Parque Centenario registra el récord con un 300% más de publicaciones, al tiempo que se disparan los avisos en zonas tradicionales como Palermo, Belgrano y Caballito; el impacto en los precios, el renovado entusiasmo por las rentas y las nuevas condiciones para los contratos
www.lanacion.com.ar
February 23, 2024
Parque Centenario sets the record with 300% more publications, while notices skyrocket in traditional areas such as Palermo, Belgrano and Caballito; the impact on prices, the renewed enthusiasm for rents and the new conditions for contracts
By Candelaria Reinoso Taccone
In the midst of the unchecked inflation that marked recent years, the value of the rents was the only one that was adjusted every 12 months, with contracts of at least three years. The law, which came into effect in 2020, ended up distorting the real estate market and harming all actors. The owners sold or left their properties empty so as not to lose money and the tenants were left without options: in some neighborhoods, zero publications were recorded. Once the law falls, the question that arises is: did the supply increase? The answer is yes and the microzone that hit the spot was Parque Centenario.
Since President Javier Milei repealed the norm through the DNU with which his government began, the parties have negotiated the most important points of the contracts: the duration, the price, the adjustments and their frequency, the currency in which they will be paid. , the guarantee to present, among others.
Little by little, owners began to make their properties available again and, almost two months after the repeal of the rental law, the number is eloquent: the supply of housing in CABA increased by 74% between December and February.
The neighborhood where supply increased the most in the last two months was the Caballito microzone known as Parque Centenario.
Given this change in the market, LA NACION revealed which were the neighborhoods in the city of Buenos Aires with the greatest increase in supply. Firstly, with a 300% increase in the last two months, Parque Centenario (microzone within Caballito) stands out, although it is important to keep in mind that it started from a very small base of publications.
In numbers, Palermo, Belgrano and Caballito registered between 300 and 600 new rental publications in the same period. One explanation for the marked increase in these neighborhoods is their long tradition as investment areas, where projects have always been built with small, 1 and 2-bedroom units, which the owners use for rent. Without the regulations of the law, those properties returned to the portals. The owners are now seeking to recover the profitability that they gave up in recent years.
Belgrano apartments that had been rented were once again offered by their ownersFabián Marelli - LA NACION
Furthermore, these neighborhoods are usually highly sought after as places of permanent or temporary residence due to their proximity to means of transportation, universities and workplaces and the wide range of shops.
A no small fact is that Palermo is the largest neighborhood in the city, which logically implies a greater number of apartments available compared to other smaller ones. As a percentage, the rental offer increased by 35%.
The Caballito microzone
The phenomenon of Parque Centenario, which experienced the largest increase in rental notices from December to February, can be explained by the “trickle-down” effect it receives from Palermo, Villa Crespo and Caballito, with tenants expanding their search and new projects accompanying this motion.
Agustín Walger, director of Lepore Propiedades, points out that for years developers from neighborhoods such as Caballito and Palermo have advanced on Parque Centenario , which has greater availability of land, to find new lots. The increased construction activity translates into an expanded supply of brand new units.
“The result is that larger plots of land were obtained, high-quality works were built with larger rooms or terraced balconies, as is now demanded, in addition to the fact that the park is very nice,” adds the broker.
Over the past three or four years, the area has witnessed a notable proliferation of ventures. According to Luis D'Odorico, director of D'Odorico Propiedades, this trend is explained by the low incidence of the value of the land, which ranges between US$300/m2 and US$400/m2 in properties with 1, 2 and 3 rooms throughout. along Díaz Vélez and Honorio Pueyrredón avenues. The average sale value of a brand new property is US$2,466/m2, well-equipped is US$2,471/m2, and used is US$2,003/m2.
“The works that began four years ago are now completed, but the lack of fluidity in sales led investors who want to sell to choose to put their properties up for rent to cover maintenance costs,” describes D'Odorico. And he adds: “The mentality of the owners in these neighborhoods tends to favor renting, since they value a constant income over financial speculation, which is more common among owners in other neighborhoods with greater purchasing power.”
Various real estate developments in recent years have been concentrated in Parque Centenario, which today registers the greatest increase in rental listings.
On the tenants' side, Walger states that "the general shortage of supply led them to expand their search map and consider areas that were not in their initial plans." The proximity to a green space and the proximity to Palermo, Villa Crespo and Caballito turned Parque Centenario into an attractive microzone for all the protagonists of the real estate market.
D'Odorico highlights the speed with which supply has skyrocketed since the DNU came into effect . “As you can now rent a property and terminate the contract with prior notice if you sell it, many investors who have their apartment for sale choose to rent instead of lowering the sales prices. And this happens not only in Parque Centenarios but in many others,” he explains.
Prices...do they go up or down?
After the pandemic and with the rental law in place, the availability of rental units steadily decreased until reaching an all-time low in February 2023, with 4,700 listings. A year later, there are more than 10,000.Last year was one of the most traumatic for the market, with an annual increase in rental values of 260% (2.65 times more than in 2022) and above inflation in 2023, which closed at 211%.
In this context, and despite the growing supply, during the first month of the year the average rental price in CABA rose by 21% compared to December 2023, according to Zonaprop notice records. January inflation was 20.6%.
The average rent for a 2-bedroom apartment in the city today is $405,218 per month. In December, $334,888 were requested for the same unit. A fact that reflects the high values of the publications is that in no neighborhood are there 2-room apartments below $300,000 per month. Studio apartments have an average rental cost of $327,295, while 3-bedroom apartments reach $558,710.
Palermo is ranked as the most expensive to rent, with a monthly value of $508,160, more than half a million pesos for a 2-room unit. In second place is Belgrano and Chacarita, one of the neighborhoods that has grown the most in recent years, is surprising in third place.
Comparison of rental prices for a 2-room apartment in CABA
Although the values did not decrease, “the owners are beginning to resign prices” to complete operations, says Soledad Balayan, director of Maure Propiedades. “We had several departments in which we lowered the value; the market is adjusting them. It is very difficult to see reductions in nominal terms with the inflation levels that the country has. Rents will tend to be in line with inflation. There will be a slowdown and they will increase less and less. But we are in a process,” analyzes the broker.
In this sense, Enrique Abatti, a lawyer specialized in the real estate market and president of the Chamber of Property Owners of the Argentine Republic, anticipates that the largest increase in supply will only be consolidated in six or seven months. “The owner who rents today will be able to defend a better price than in a while, when there is more competition and when the tenant is in a position to demand more conditions,” he says.
Palermo continues to be a fashionable neighborhood and is on average the most expensive to rentFabián Marelli - LA NACION
New contract modalities
The DNU also had an impact on the modality of contracts by granting freedom to the parties to agree on various aspects of the rental. Although now each agreement may be different and particular, real estate agencies agree on a trend. “The vast majority are opting for a rental duration of two years,” says Peter Woyzechowsky, director of marketing and communications at Finaer.Abatti, for his part, emphasizes another format that usually appears since the rule was dropped: “ Landlords prefer to agree on contracts for one year to evaluate the tenant's behavior. “Committing to a two-year contract, even if it is the tenants' preference for stability, means partnering with someone they don't yet know, unless they already have previous experience with that person.”
When choosing an index with which to update the rental price, Woyzechowsky points out that in CABA the Consumer Price Index (CPI) is mostly used, although there are also cases in which the increase is governed by the Price Index. Average Taxable Remuneration of Stable Workers (RIPTE), the Index of the Argentine Chamber of Construction (CAC), or even percentages agreed directly between the parties.
When choosing an index with which to update the rental price, the Consumer Price Index (CPI) is mostly used.CrizzyStudio - Shutterstock
On the other hand, Abatti observes that outside the city of Buenos Aires, provincial indicators prevail to seal contracts. “Since not all places have the same cost of living, they prefer to use the indices provided by the statistics and census institutes of each province,” he mentions. Regarding the frequency of the adjustment, experts agree that the periods are currently established preferably quarterly or four-monthly and, to a lesser extent, every six months. The premise is clear for owners: not to lose (or lose as little as possible) against inflation.
Although publications in dollars have proliferated in recent months, Abatti assures that rentals in foreign currency are rare and that Argentine pesos are being used in the vast majority of operations.
Another important change brought by the DNU, which favors the reintegration of new properties into the rental market, is the possibility of terminating the contract for specific reasons , as long as they are previously agreed upon and duly expressed in the document to be signed (with The law only allowed termination by the tenant or in the case of sale of the property, prior clarification in the contract).
Currently, a clause can be included in the contract, allowing the possibilities of early termination for various reasons to be expanded and agreeing on compensation . Both parties have the right to terminate the contract at any time, as long as this is stipulated in the agreement.
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