BuySellBA
Administrator
With increases that exceed 200% in one year, the first contracts with changes to the rental law are already signed - Infobae
Source:
www.infobae.com
October 25, 2023
Experts warn of a shortage of agreements and contract extensions remain active in Argentina. Extensions are done for 3 or 6 months.
By José Luis Cieri
A person hands over the key to an apartment in a housing rental process. Little action at this time where it is difficult to get units (Illustrative image Infobae)
The implementation of the changes in the rental law that Congress recently voted on resulted in a slow trickle of agreements. Experts agree that the first contracts, governed by the new provisions, are emerging gradually. Caution prevails in a process that is expected to be prolonged and while some tenants and owners adapt to the new regulations, others are seeking extensions of 3 to 6 months.
The new contracts established with a duration of three years and semiannual adjustments according to the Casa Propia formula, are at this time more common in the interior of the country than in the city of Buenos Aires and Greater Buenos Aires (GBA).
This considerable cost barrier is added to the persistent shortage of available units, derived from the rejection of numerous owners in Argentina since the passing of the law and its reform. These factors contribute to the continuous increase in values in the rental market.
Josefina Pantano , a real estate agent from San Juan and current secretary of the Real Estate Federation of the Argentine Republic (FIRA), told Infobae that “the few contracts signed in the last week are adjusting to the new scheme approved in Congress, and the owners They continue to rent their properties under the new legal conditions. However, the rental supply has not experienced a significant increase, and throughout Argentina, proposals remain at historically low levels, comparable to the last 50 years.”
Some contracts were made through the new scheme after the Rental Law was reformed: duration of three years and semiannual adjustments through Casa Propia (Photo: Getty)
In Chaco, Entre Ríos, Buenos Aires and Córdoba, the situation presents similarities. Although the adjustment based on the Own House formula results in a lower percentage compared to the Rental Contract Index (ICL), the possibility of updating the contracts semiannually provides a certain balance.
Emilio Caravaca Pazos , president of FIRA, pointed out that it is too early to evaluate the impact of this new formula on the agreements and it will be the parties involved, made up of millions of tenants and owners in the country, who will determine if the current conditions are beneficial. or harmful. “For now, the situation in most provinces remains similar to that existing before the law reform: few proposals and high values,” he highlighted.
Marta Liotto , president of the Buenos Aires Real Estate Professional Association, confirmed this situation and highlighted that the market remains stagnant, without new contracts being formalized. “In this context, it is relevant to reiterate the position of real estate professionals regarding the use of the Own House coefficient, which registers an increase below half of inflation, which discourages owners from putting their units on the market” , he claimed.
Currently, contract extensions are the only dynamic that is evident in the rental market in CABA.
For some landlords, the expectation is that the next administration will repeal the current legislation regulating rental contracts, in the hope that a new law will be formulated. They consider that, given that inflation continues to be high, it is not profitable to commit to three-year contracts, even if these are adjusted semiannually under the Casa Propia scheme.
Ricardo Botana , president of the Argentine Tenants Union, summarized to Infobae that “the ideal option today would be for tenants to be able to choose to agree to new contracts instead of resorting to extensions. In the case of extensions, the most convenient thing would be to extend the term as much as possible, which would allow tenants to have more time to find new homes in a market characterized by a lack of supply."
www.buysellba.com
Source:
Con aumentos que superan el 200% en un año, ya se firman los primeros contratos con los cambios a la ley de alquileres
Expertos advierten escasez de acuerdos y se mantienen activas las prórrogas de contratos en la Argentina. Las extensiones se hacen por 3 o 6 meses
www.infobae.com
October 25, 2023
Experts warn of a shortage of agreements and contract extensions remain active in Argentina. Extensions are done for 3 or 6 months.
By José Luis Cieri
A person hands over the key to an apartment in a housing rental process. Little action at this time where it is difficult to get units (Illustrative image Infobae)
The implementation of the changes in the rental law that Congress recently voted on resulted in a slow trickle of agreements. Experts agree that the first contracts, governed by the new provisions, are emerging gradually. Caution prevails in a process that is expected to be prolonged and while some tenants and owners adapt to the new regulations, others are seeking extensions of 3 to 6 months.
The new contracts established with a duration of three years and semiannual adjustments according to the Casa Propia formula, are at this time more common in the interior of the country than in the city of Buenos Aires and Greater Buenos Aires (GBA).
However, it is important to highlight that these agreements are based on a high price base, with increases that exceed 200% year-on-year. For example, a rental contract for a three-bedroom home in Rosario, which just a year ago amounted to $100,000 per month, is currently being signed for 300,000 pesos.
This considerable cost barrier is added to the persistent shortage of available units, derived from the rejection of numerous owners in Argentina since the passing of the law and its reform. These factors contribute to the continuous increase in values in the rental market.
Josefina Pantano , a real estate agent from San Juan and current secretary of the Real Estate Federation of the Argentine Republic (FIRA), told Infobae that “the few contracts signed in the last week are adjusting to the new scheme approved in Congress, and the owners They continue to rent their properties under the new legal conditions. However, the rental supply has not experienced a significant increase, and throughout Argentina, proposals remain at historically low levels, comparable to the last 50 years.”
Some contracts were made through the new scheme after the Rental Law was reformed: duration of three years and semiannual adjustments through Casa Propia (Photo: Getty)
In Chaco, Entre Ríos, Buenos Aires and Córdoba, the situation presents similarities. Although the adjustment based on the Own House formula results in a lower percentage compared to the Rental Contract Index (ICL), the possibility of updating the contracts semiannually provides a certain balance.
Emilio Caravaca Pazos , president of FIRA, pointed out that it is too early to evaluate the impact of this new formula on the agreements and it will be the parties involved, made up of millions of tenants and owners in the country, who will determine if the current conditions are beneficial. or harmful. “For now, the situation in most provinces remains similar to that existing before the law reform: few proposals and high values,” he highlighted.
Extensions are still active
In CABA, there is a notable absence of new contracts under the Own House format, with extensions of agreements that recently expired prevailing, which mostly range between 3 and 6 months.Marta Liotto , president of the Buenos Aires Real Estate Professional Association, confirmed this situation and highlighted that the market remains stagnant, without new contracts being formalized. “In this context, it is relevant to reiterate the position of real estate professionals regarding the use of the Own House coefficient, which registers an increase below half of inflation, which discourages owners from putting their units on the market” , he claimed.
Currently, contract extensions are the only dynamic that is evident in the rental market in CABA.
Enrique Abatti (h.) , lawyer specialized in Real Estate Law and member of the Chamber of Property Owners of the Argentine Republic, reported that “more than 90% of owners reject the idea of renewing agreements with a duration of three years. Most opt for extension agreements with indexation, following ICL regulations. In addition, many property owners are waiting for the results of the runoff to make decisions, as some anticipate changes in rental regulations based on the political results.”
For some landlords, the expectation is that the next administration will repeal the current legislation regulating rental contracts, in the hope that a new law will be formulated. They consider that, given that inflation continues to be high, it is not profitable to commit to three-year contracts, even if these are adjusted semiannually under the Casa Propia scheme.
Ricardo Botana , president of the Argentine Tenants Union, summarized to Infobae that “the ideal option today would be for tenants to be able to choose to agree to new contracts instead of resorting to extensions. In the case of extensions, the most convenient thing would be to extend the term as much as possible, which would allow tenants to have more time to find new homes in a market characterized by a lack of supply."
www.buysellba.com
