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The rental crisis: Changes in the law caused supply to fall further and contracts were paralyzed until after the elections - Infobae
Source:
www.infobae.com
October 18, 2023
By Jose Luis Cieri
In CABA and Greater Buenos Aires, owners continue to withdraw properties and postpone agreements until the electoral panorama is clearer. There is dissatisfaction with the Casa Propia adjustment method. Of the 10 queries that real estate agencies receive, 7 are for renting a home.
The contracts maintain their duration of three years, but are updated with another index (Illustrative image Infobae)
With the implementation of the changes in the Rental Law, the Argentine real estate market faces a path of challenges and significant transformations. This first day of the reforms marking a milestone in the dynamics of rentals throughout the country, generating a series of questions and expectations.
From the sector they assured that the modifications will lead to a greater reduction in supply and, simultaneously, an increase in the prices of new contracts. In addition, cases have already been reported in which agreements that were about to be finalized have been suddenly stopped.
Although the contracts will maintain their three-year duration, a notable transformation was implemented in the updates. Instead of depending on the Central Bank's Lease Contract Index (ICL), the Casa Propia coefficient will now be used . In addition, it is important to highlight that contractual increases will be semiannual and the publication of prices in dollars is prohibited.
However, despite these measures, confusion reigns in the real estate sector and the long-term impact that the modifications could have on the industry is being analyzed.
In this real estate agency they planned to finalize three agreements: a three-room in Palermo for $260,000 per month, a two-room in Recoleta for $200,000, and a studio in Recoleta for $165,000 per month. However, they were left waiting.
“In addition, the owners are waiting for the result on Sunday. They consider that both Javier Milei and Patricia Bullrich have announced their intention to repeal the 2020 law if they win. Sergio Massa even talked about each province having its own regulations. This leads to the proliferation of informal agreements, not supported by real estate companies, that are negotiated between owners and tenants,” Toselli added.
Accessing housing through a rental is not an easy task at the moment (Illustrative image Infobae)
The contracts signed until last Friday are regulated by the previous provisions of the Rental Law, characterized by their duration of three years with annual adjustments based on ICL. The changes recently approved by Congress began to take effect today and do not apply retroactively.
Matías Cuello , from the real estate company that bears his name and operates in the western area of Greater Buenos Aires, told Infobae that “the demand is overwhelming and we no longer have waiting lists due to our inability to satisfy it. Until last week, any property that was offered in pesos found a tenant in less than 24 hours, as long as the interested party presented all the necessary requirements. Since the sanction of the modifications, the majority of owners withdrew their properties from the offer.”
The feeling is that until inflation decreases it will be impossible to balance the rental market. Furthermore, the owners are against regulations that are tied to some index, they prefer to return to agreements between parties and with free agreement.
“With three-digit inflation year-on-year, the acceptance of Casa Propia becomes complicated since it is based on the lowest indicator between the annual salary variation and the average inflation during the same period. In addition, it includes a Salary Variation Coefficient (CVS) with a capacity of 0.9, which means that only 90% of the average salary variation is taken. The owners argue that they could lose up to 40% until the contract is updated, which could happen next May if an agreement is signed these days,” Cuello explained.
With the recent changes, it is unclear if extensions will continue to be a viable option. In this context, a tenant whose contract is coming to an end and cannot find new housing could face the difficult decision of leaving their current neighborhood or moving in with relatives until the situation becomes clearer.
Karina Gonzalez , representative of Propietarios Unidos de Argentina, explained to Infobae her discontent with the new legislation: “We are forced to rent under an index much lower than the ICL, which was already below inflation. Therefore, we reject this regulation and believe that few will be willing to rent under its terms. Furthermore, it appears that extensions of existing agreements could be prohibited, further complicating the picture. "We are not going to rent until the national government changes and repeals this controversial law."
The legislation contemplates various tax benefits for both owners and tenants, related to the payment of the monotribute, the Personal Property Tax and the Tax on Debits and Credits (to the check).
Ricardo Botana , president of the Argentine Tenants Union, assured that the reform remains insufficient to address the problem of access to housing in Argentina.
“The issue of social rent, which remains relevant, has not been addressed. Furthermore, in the midst of high inflation, unresolved fundamental challenges are faced. Tenants with good relationships with landlords can stay until they find a new home to rent. The ideal solution would be the return of mortgage credit and the possibility for those with savings or purchasing power to access ownership of their home,” he concluded.
www.buysellba.com
Source:
La crisis de los alquileres: los cambios en la ley hicieron caer más la oferta y se paralizaron los contratos hasta después de las elecciones
En CABA y Gran Buenos Aires, los propietarios siguen retirando inmuebles y postergan acuerdos hasta tener más claro el panorama electoral. Hay descontento con el método de ajuste Casa Propia. De 10 consultas que reciben las inmobiliarias, 7 son para alquilar una vivienda
www.infobae.com
October 18, 2023
By Jose Luis Cieri
In CABA and Greater Buenos Aires, owners continue to withdraw properties and postpone agreements until the electoral panorama is clearer. There is dissatisfaction with the Casa Propia adjustment method. Of the 10 queries that real estate agencies receive, 7 are for renting a home.
The contracts maintain their duration of three years, but are updated with another index (Illustrative image Infobae)
With the implementation of the changes in the Rental Law, the Argentine real estate market faces a path of challenges and significant transformations. This first day of the reforms marking a milestone in the dynamics of rentals throughout the country, generating a series of questions and expectations.
From the sector they assured that the modifications will lead to a greater reduction in supply and, simultaneously, an increase in the prices of new contracts. In addition, cases have already been reported in which agreements that were about to be finalized have been suddenly stopped.
Although the contracts will maintain their three-year duration, a notable transformation was implemented in the updates. Instead of depending on the Central Bank's Lease Contract Index (ICL), the Casa Propia coefficient will now be used . In addition, it is important to highlight that contractual increases will be semiannual and the publication of prices in dollars is prohibited.
However, despite these measures, confusion reigns in the real estate sector and the long-term impact that the modifications could have on the industry is being analyzed.
Jorge Toselli , from JT Inmobiliaria, told Infobae that “the three traditional rental contracts that we had to sign today fell apart. The property owners preferred to postpone them until after the elections. Furthermore, they understand that, although semiannual adjustments are allowed, the new increase coefficient lags behind inflation, which leads them to perceive losses in the midst of economic decoupling."
In this real estate agency they planned to finalize three agreements: a three-room in Palermo for $260,000 per month, a two-room in Recoleta for $200,000, and a studio in Recoleta for $165,000 per month. However, they were left waiting.
“In addition, the owners are waiting for the result on Sunday. They consider that both Javier Milei and Patricia Bullrich have announced their intention to repeal the 2020 law if they win. Sergio Massa even talked about each province having its own regulations. This leads to the proliferation of informal agreements, not supported by real estate companies, that are negotiated between owners and tenants,” Toselli added.
Accessing housing through a rental is not an easy task at the moment (Illustrative image Infobae)
The contracts signed until last Friday are regulated by the previous provisions of the Rental Law, characterized by their duration of three years with annual adjustments based on ICL. The changes recently approved by Congress began to take effect today and do not apply retroactively.
High demand, low supply
Since last Friday, of every 10 queries that reach real estate agencies, whether by phone, online or through WhatsApp, 7 focus on searching for rentals.Matías Cuello , from the real estate company that bears his name and operates in the western area of Greater Buenos Aires, told Infobae that “the demand is overwhelming and we no longer have waiting lists due to our inability to satisfy it. Until last week, any property that was offered in pesos found a tenant in less than 24 hours, as long as the interested party presented all the necessary requirements. Since the sanction of the modifications, the majority of owners withdrew their properties from the offer.”
In both CABA and the GBA the situation for those looking for a roof to rent became even more complicated.
The feeling is that until inflation decreases it will be impossible to balance the rental market. Furthermore, the owners are against regulations that are tied to some index, they prefer to return to agreements between parties and with free agreement.
“With three-digit inflation year-on-year, the acceptance of Casa Propia becomes complicated since it is based on the lowest indicator between the annual salary variation and the average inflation during the same period. In addition, it includes a Salary Variation Coefficient (CVS) with a capacity of 0.9, which means that only 90% of the average salary variation is taken. The owners argue that they could lose up to 40% until the contract is updated, which could happen next May if an agreement is signed these days,” Cuello explained.
What happens with extensions?
This month in CABA, it is estimated that around 12,500 contracts expire, and the majority of tenants have had to resort to extensions of three months or even a year to remain in the home they rent. However, owners are reluctant to sign three-year agreements again.With the recent changes, it is unclear if extensions will continue to be a viable option. In this context, a tenant whose contract is coming to an end and cannot find new housing could face the difficult decision of leaving their current neighborhood or moving in with relatives until the situation becomes clearer.
Worry
Vanesa Ibarra , from Salguero Propiedades, believes that the ICL and Casa Propia are not the problem. “Legislators pursue their own political interests and ultimately harm everyone equally. Tenants are having difficulty finding housing and landlords, despite sanctioned tax benefits, are reluctant to continue offering their properties for traditional rentals. This has led many to choose to put their properties up for sale or prefer to keep them unoccupied, without obtaining any profitability,” she explained.Karina Gonzalez , representative of Propietarios Unidos de Argentina, explained to Infobae her discontent with the new legislation: “We are forced to rent under an index much lower than the ICL, which was already below inflation. Therefore, we reject this regulation and believe that few will be willing to rent under its terms. Furthermore, it appears that extensions of existing agreements could be prohibited, further complicating the picture. "We are not going to rent until the national government changes and repeals this controversial law."
The legislation contemplates various tax benefits for both owners and tenants, related to the payment of the monotribute, the Personal Property Tax and the Tax on Debits and Credits (to the check).
Ricardo Botana , president of the Argentine Tenants Union, assured that the reform remains insufficient to address the problem of access to housing in Argentina.
“The issue of social rent, which remains relevant, has not been addressed. Furthermore, in the midst of high inflation, unresolved fundamental challenges are faced. Tenants with good relationships with landlords can stay until they find a new home to rent. The ideal solution would be the return of mortgage credit and the possibility for those with savings or purchasing power to access ownership of their home,” he concluded.
www.buysellba.com
