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Although the increase in rents has slowed down, the rent for a one-bedroom apartment in CABA became more expensive again in July and averaged $464,000 per month - Infobae
Source:
July 31, 2024
According to a private analysis, the supply of apartments expanded after the DNU, but costs remain high for tenants. In the purchase-sale market there is a firm change of trend: values rose 5% in the year
By Jose Luis Cieri
Rental prices for apartments in CABA rose by 3.3% in July according to a real estate market analysis (Illustrative Image Infobae)
The average price of a two-room apartment in the city of Buenos Aires is $464,742 per month and registered an increase of 3.3% in July, according to a private analysis. In 2024, the increase is 39%, 50 percentage points below the accumulated increase in the same period of 2023 (89.6%).
Despite the expansion of supply following the repeal of the Rental Law through the Government's DNU, costs for tenants remain high, making access to housing difficult for many, and to this must be added the high value of expenses that average $175,000 in CABA (also impacting owners).
Since the repeal, prices have started to slow down in February after monthly increases that had reached an average of up to 20%. Under the previous law, rent increases occurred every six months or a year, depending on the contract, which led thousands of owners to raise prices so as not to fall behind the inflation rate.
With the possibility of closing contracts based on the preferences of the parties involved (landlords/tenants), a moderation in rent increases was observed, providing relative relief to tenants (especially those who achieved significant wage recovery, other workers are still struggling to bear the costs).
Source: Zonaprop
Leandro Molina , country manager of Grupo QuintoAndar (which includes Zonaprop, who made the report) for Argentina and Peru, told Infobae that “starting in January, the demand pressure for dollar advertisements, which had peaked at the end of 2023, began to strongly decline. Currently, the number of advertisements in dollars and pesos is being balanced.”
“In only six neighborhoods (Puerto Madero, Retiro, Recoleta, Palermo, Belgrano, Núñez) is the majority of the offer in dollars. This trend is expected to continue and the high demand that persists in the rental market will be confirmed,” Molina added.
Offer
The volume of apartment supply fell by 4.8% month-on-month, however, it remains three times higher than that recorded in February 2023.“From December to July, demand grew by 35% while supply increased by 173%, reflecting an increase in rental searches and active listings. Although July saw a 4.8% decrease in supply, it still shows a 198% increase since July 2023. Post DNU, the market began to recover, with supply growing by 62% in January compared to December 2023 and a slowdown in price increases of 2.9% in February,” Molina added.
A 40-square-meter studio apartment rents for $397,171 per month, a 50-square-meter two-room apartment for $464,742, and a 70-square-meter three-room apartment for $628,168 per month.
Source: Zonaprop
The work confirmed that the rental price of new contracts slowed down in CABA starting in February 2024. In July, it registered a monthly increase of 2.2%, while in the last twelve months, it accumulated an increase of 163.7%, advancing below inflation and the adjustment of the Lease Contracts Index (249.1%) .
More expensive and cheaper
In the ranking of the most expensive neighborhoods to rent, Puerto Madero leads with an average price of $958,337 per month. It is followed by Palermo and Núñez, with an average value of $530,763 and $517,793 per month.In contrast, Villa Lugano is the most affordable neighborhood to rent, with an average price of $303,133 per month. Floresta ($378,778) and Mataderos ($386,085) complete the list of the most affordable.
Inflection point
According to Zonaprop's survey, the average price per square meter rose 0.7% in July and has accumulated 13 consecutive months of increases. It stands at USD 2,286 dollars, 6.3% above the minimum recorded in June 2023 and 18.4% below the maximum in March 2019.And so far this year, the increase is 5%, consolidating itself as a turning point in contrast to the last five years of constant declines.
Source: Zonaprop
Martín Pinus , from Martín Pinus Real Estate, commented that since the beginning of 2024, real estate agencies have observed a revival in enquiries, increasing month by month. “The indicators show 25% more deeds signed compared to the same period of the previous year , generating positive expectations and we are very optimistic. However, we must remain cautious regarding a sales boom, considering the different context to that of 2018 when mortgage credit and money laundering had a significant impact.”
A 40 m2 studio apartment in CABA costs USD 100,669, a 50 m2 two-room apartment costs USD 121,018, and a 70 m2 three-room apartment costs USD 166,652.
Since last January, the percentage of neighborhoods with an increase began to rise. Currently, 85% of neighborhoods have registered an increase in their values, similar to the indicator for August 2017.
Source: Zonaprop
“In October 2023, market prices hit a low point and began a progressive increase, coinciding with an increase in construction costs. This led to the increase in projects under construction due to replacement, directly boosting the price of brand new apartments. According to our reports, construction costs will rise 6.1% in 2024, reaching USD 2,671 per m2 for buildings under construction, with an annual increase of 12.38%,” said Molina.
Puerto Madero also wins
The youngest neighborhood in Buenos Aires continues to be the most expensive neighborhood to buy, with a value of USD 5,921 per m2. It is followed by Palermo (USD 3,185) and Belgrano (USD 2,953 per m2).
Source: Zonaprop
On the other hand, Lugano remains the cheapest option, with an average price of USD 991 per m2. Nueva Pompeya (USD 1,379) and Villa Riachuelo (USD 1,432) complete the ranking of the neighbourhoods with the cheapest offer.
“In recent months, the market began to reverse its downward trend, stabilising and recovering moderately with an average increase of 5% in the first half of the year. I believe that it is a good time to buy before the price of square metres continues to increase, especially in used properties, which are attractive due to the increase in construction costs. Regarding the impact of mortgage loans, this will have a greater impact on smaller properties in the coming months,” concluded Pinus.
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