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Without a Rental Law, what will happen to prices in 2025 and how will contracts be updated? - Infobae
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www.infobae.com
January 01, 2025
The market is showing signs of stabilization, with supply growing to historic levels and more demand for purchase, which allows tenants and owners to negotiate on different terms. How much are values expected to rise this year?
By Jose Luis Cieri
Experts advise negotiating contracts in pesos with half-yearly adjustments for better conditions (Illustrative Image Infobae)
The real estate sector is showing signs of stabilization in regards to the rental market in the city of Buenos Aires , amid a panorama of adjustments that have been running below inflation for several months and new credit dynamics that impact both supply and demand. The end of 2024 left relevant figures and encouraging prospects for this 2025 that has just started.
According to recent data from the Zonaprop portal , the search for properties for sale grew by 83% in the last year, while the demand for rentals increased by 9% compared to 2023. This trend is linked, in part, to the repeal of the Rental Law, which generated a notable increase in supply and relief in terms of prices.
Germán Gómez Picasso , from Reporte Inmobiliario, highlighted to Infobae: “The offer grew 10 times and the values slowed down their upward momentum, which was out of control. The measure was viewed favorably, even in the international arena.”
The crisis that lasted until last February has cleared up, and there are now nearly 16,000 apartments available for rent in most of the neighborhoods of Buenos Aires.
However, growth was not uniform in other parts of the country, where construction was lower and the housing shortage is a determining factor. Although supply expanded in cities such as Córdoba capital, La Plata, Mar del Plata, Rosario, Mendoza and San Miguel de Tucumán, it is difficult to find housing at reasonable prices in towns with populations between 100,000 and 200,000 inhabitants.
Although the Real Estate Federation of the Argentine Republic (FIRA) confirmed that, little by little, the owners of properties that recover them after the expiration of the contract are offering them for rent again, since they are satisfied with the format of agreements established by the DNU protected by the Civil and Commercial Code of the Nation.
This allows for free contracts between parties, where, with the intermediation of real estate agencies, convenient conditions can be agreed between owners and tenants, with adjustments linked to salary agreements, for example. This scheme could favor the development of the rental market by 2025.
The vice president of the Argentine Real Estate Chamber, Daniel Zampone , projected that rents will follow the evolution of inflation in 2025, adjusting quarterly by the Consumer Price Index (CPI). He also explained: “We estimate an increase of close to 100% for 2025, due to the proximity of contracts to inflation. However, with the reactivation of mortgage loans and the increase in supply, we expect that this context will reduce tenants and encourage new owners.”
The rental offer has multiplied after the repeal of the Rental Law, now tenants can tour homes before renting them and extreme increases have been stopped (Illustrative Image Infobae)
Tenants who still have contracts in force under the Rental Law, repealed by DNU 70/2023, will have to update their price in January with a 190.9% year-on-year increase. This represents a strong impact on the pocketbook, since those who paid 200,000 pesos per month until December will now have to pay 581,800 pesos per month until December 2025.
And as reported by Infobae , for the first time in more than 18 months, those who have contracts under this scheme will face an adjustment of less than 200% year-on-year . If inflation remains below 3% per month, it is estimated that from April the Rental Contract Index could fall to less than 120%, which would mean concrete relief for tenants.
Due to the expansion of supply in CABA and the main cities, price stabilization for new post-DNU contracts is already commonplace.
According to Zampone, renting a studio apartment in CABA costs on average $450,000, while a one-bedroom apartment costs $550,000, and a two-bedroom apartment costs around $700,000 per month. “It all depends on the dynamics of each neighborhood and the conditions of the apartment,” he explained.
Without the Rental Law, contracts are usually agreed for a two-year term, with quarterly or four-monthly adjustments based on the CPI and the Rental Contract Index (ICL). Other indexes are also used, such as that of the Argentine Chamber of Construction (CAC), and this scheme would not change.
For his part, Oscar Puebla , architect and real estate expert, said that current contracts would have increases between 20 and 30% above market offers , and recommended negotiating renewals in pesos with 12% adjustments every six months. “Prices must always be negotiated. The greater offer generates a negotiating power that favors tenants,” he commented.
Looking ahead, the outlook is optimistic. Zampone said that a key factor in the normalisation of the market is the increase in mortgage loans.
Mortgage loans could represent up to 50% of transactions by May or June 2025 (Illustrative Image Infobae)
According to his estimates, by May 2025, between 40 and 50% of real estate transactions will be backed by loans, compared to the current 15% . He added that this “will allow for a decrease in the number of tenants, the creation of more owners and an increase in the stock of units thanks to projects pending completion by 2025.”
Meanwhile, Puebla emphasized that, after a year of the repeal of the “Cursed Rental Law,” the current scenario benefits tenants. “Mortgage loans are not only a viable option, but they have consolidated an environment where tenants have greater room to negotiate with landlords, who now, without the previous regulation, are more open to listening to counterproposals and a balance can be found for both,” he said.
Given this context, he advised carefully analyzing contractual conditions and betting on short adjustment periods. “By March or April we will be much better off and the offer will continue to grow, so today we estimate that the expectations for 2025 are very good,” concluded Zampone.
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Source:
Sin Ley de Alquileres, qué pasará con los precios en 2025 y cómo se actualizarán los contratos
El mercado muestra señales de estabilización, con una oferta que creció a niveles históricos y más demanda de compra, lo que habilita a inquilinos y propietarios a negociar en otras condiciones. Cuánto se espera que suban los valores este año
www.infobae.com
January 01, 2025
The market is showing signs of stabilization, with supply growing to historic levels and more demand for purchase, which allows tenants and owners to negotiate on different terms. How much are values expected to rise this year?
By Jose Luis Cieri
Experts advise negotiating contracts in pesos with half-yearly adjustments for better conditions (Illustrative Image Infobae)
The real estate sector is showing signs of stabilization in regards to the rental market in the city of Buenos Aires , amid a panorama of adjustments that have been running below inflation for several months and new credit dynamics that impact both supply and demand. The end of 2024 left relevant figures and encouraging prospects for this 2025 that has just started.
According to recent data from the Zonaprop portal , the search for properties for sale grew by 83% in the last year, while the demand for rentals increased by 9% compared to 2023. This trend is linked, in part, to the repeal of the Rental Law, which generated a notable increase in supply and relief in terms of prices.
Germán Gómez Picasso , from Reporte Inmobiliario, highlighted to Infobae: “The offer grew 10 times and the values slowed down their upward momentum, which was out of control. The measure was viewed favorably, even in the international arena.”
The crisis that lasted until last February has cleared up, and there are now nearly 16,000 apartments available for rent in most of the neighborhoods of Buenos Aires.
However, growth was not uniform in other parts of the country, where construction was lower and the housing shortage is a determining factor. Although supply expanded in cities such as Córdoba capital, La Plata, Mar del Plata, Rosario, Mendoza and San Miguel de Tucumán, it is difficult to find housing at reasonable prices in towns with populations between 100,000 and 200,000 inhabitants.
Although the Real Estate Federation of the Argentine Republic (FIRA) confirmed that, little by little, the owners of properties that recover them after the expiration of the contract are offering them for rent again, since they are satisfied with the format of agreements established by the DNU protected by the Civil and Commercial Code of the Nation.
This allows for free contracts between parties, where, with the intermediation of real estate agencies, convenient conditions can be agreed between owners and tenants, with adjustments linked to salary agreements, for example. This scheme could favor the development of the rental market by 2025.
What is expected for this year
Rental prices, while still high year-on-year, have significantly slowed their rate of increase since the end of 2023.The vice president of the Argentine Real Estate Chamber, Daniel Zampone , projected that rents will follow the evolution of inflation in 2025, adjusting quarterly by the Consumer Price Index (CPI). He also explained: “We estimate an increase of close to 100% for 2025, due to the proximity of contracts to inflation. However, with the reactivation of mortgage loans and the increase in supply, we expect that this context will reduce tenants and encourage new owners.”
The rental offer has multiplied after the repeal of the Rental Law, now tenants can tour homes before renting them and extreme increases have been stopped (Illustrative Image Infobae)
Tenants who still have contracts in force under the Rental Law, repealed by DNU 70/2023, will have to update their price in January with a 190.9% year-on-year increase. This represents a strong impact on the pocketbook, since those who paid 200,000 pesos per month until December will now have to pay 581,800 pesos per month until December 2025.
And as reported by Infobae , for the first time in more than 18 months, those who have contracts under this scheme will face an adjustment of less than 200% year-on-year . If inflation remains below 3% per month, it is estimated that from April the Rental Contract Index could fall to less than 120%, which would mean concrete relief for tenants.
Due to the expansion of supply in CABA and the main cities, price stabilization for new post-DNU contracts is already commonplace.
According to Zampone, renting a studio apartment in CABA costs on average $450,000, while a one-bedroom apartment costs $550,000, and a two-bedroom apartment costs around $700,000 per month. “It all depends on the dynamics of each neighborhood and the conditions of the apartment,” he explained.
Without the Rental Law, contracts are usually agreed for a two-year term, with quarterly or four-monthly adjustments based on the CPI and the Rental Contract Index (ICL). Other indexes are also used, such as that of the Argentine Chamber of Construction (CAC), and this scheme would not change.
For his part, Oscar Puebla , architect and real estate expert, said that current contracts would have increases between 20 and 30% above market offers , and recommended negotiating renewals in pesos with 12% adjustments every six months. “Prices must always be negotiated. The greater offer generates a negotiating power that favors tenants,” he commented.
Looking ahead, the outlook is optimistic. Zampone said that a key factor in the normalisation of the market is the increase in mortgage loans.
Mortgage loans could represent up to 50% of transactions by May or June 2025 (Illustrative Image Infobae)
According to his estimates, by May 2025, between 40 and 50% of real estate transactions will be backed by loans, compared to the current 15% . He added that this “will allow for a decrease in the number of tenants, the creation of more owners and an increase in the stock of units thanks to projects pending completion by 2025.”
Meanwhile, Puebla emphasized that, after a year of the repeal of the “Cursed Rental Law,” the current scenario benefits tenants. “Mortgage loans are not only a viable option, but they have consolidated an environment where tenants have greater room to negotiate with landlords, who now, without the previous regulation, are more open to listening to counterproposals and a balance can be found for both,” he said.
Given this context, he advised carefully analyzing contractual conditions and betting on short adjustment periods. “By March or April we will be much better off and the offer will continue to grow, so today we estimate that the expectations for 2025 are very good,” concluded Zampone.
www.buysellba.com
