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Without the Rental Law, the supply of apartments tripled in the first half of the year in CABA - Infobae
Source:
www.infobae.com
July 23, 2024
The report analyzed the behavior after the DNU that repealed the 2020 law and that had been reformed last October. Which departments expanded the most in the market?
By Jose Luis Cieri
The expansion of the offer has made it possible to generate more rental contracts in CABA since the DNU has been in force, until the end of the year contract extensions dominated (Illustrative Image Infobae)
The repeal of the Rental Law through the Government's DNU had a direct impact on the rental market. On the main real estate portals, the number of publications grew and prices began to slow down in a context of rising inflation. Currently, there are an estimated 16,000 apartments for rent in the city of Buenos Aires.
A private report based on data from the General Directorate of Statistics and Census of the Buenos Aires City Government showed that in just 6 months, the supply of apartments for rent tripled in the city compared to last November. According to data obtained from Argenprop, the supply of rentals, measured in surface area (square meters), grew by 226% compared to November.
The Tejido Urbano Foundation (also supported by statistics from Federico González Rouco , an economist and expert in the sector), maintains that this increase was not homogeneous. There was a greater growth in the published supply of studio apartments, which grew by 331% between May and November. The number of 1-bedroom apartment grew by 302%, the number of 2-bedrooms apartments by 228%, and the number of 3 and 4-bedrooms apartments by 41 percent.
“The increase was greater in small units, which may include the return to traditional rental of units that were offered for temporary rent, since they are usually the most in demand. In terms of access to housing, this is good news, because small units are the cheapest and, consequently, the most accessible,” Fernando Álvarez de Celis , executive director of Tejido Urbano, told Infobae.
Rentals in 2024 (Source: Federico González Rouco with data from the General Directorate of Statistics and Census of the Buenos Aires Government and Argenprop)
The work highlighted that until December, rents were regulated by two national laws: 27,551 of 2020 and 27,737 of 2023 (a reform that was applied in October and only in force for less than three months). Broadly speaking, these laws defined how the rental price should be updated (Lease Contract Index, ICL or Casa Propia, both well below inflation), how often (annually or semi-annually) and for what period (3 years). Although there were other issues, these were the main regulations on the residential rental market.
According to Tejido Urbano, this was supposedly good news for the owners, as it allowed them to sign contracts in which the price did not lose out to inflation constantly, but also for the tenant, because it allowed initial prices to drop and, with this, one of the main barriers to entry.
Prices fell sharply, consistent with the increase in supply. It is important to look at the total cost of the contract, not just the initial price.
The average values of 1, 2 and 3-room properties fell 39% in real terms, mainly between December and February. Initial prices are reaching a new equilibrium, being lower than that of the 2020-2023 period, affecting affordability. In November, the average initial rent in CABA represented 75% of an average salary, rising to 79% in December due to inflation and devaluation, according to the Tejido Urbano Foundation.
Prices in Buenos Aires (Source: Federico González Rouco with data from the General Directorate of Statistics and Census of the Buenos Aires Government and Argenprop)
From January through April, starting rents barely rose , while wages rose more than rents but less than inflation. In April, the average rent represented just over 50% of an average wage. While still high compared to the 2011-2021 average of 40%, wages are expected to continue to gain ground on rent.
According to the Scalabrini Ortiz Center for Economic and Social Studies (CESO), in June, the average values of the departments were as follows:
Álvarez de Celis said: “The rental market has an initial problem: profitability in dollars is low and the cost for tenants is high. The equilibrium will always be unstable and regulations inefficient. However, the increase in supply and the drop in prices in real terms is good news.”
Álvarez de Celis added: “Tax incentives for landlords offering long-term contracts with moderate increases could improve affordability and provide stability for tenants and landlords.”
The launch of mortgage loans offers an opportunity for tenants with savings capacity. However, there is a shortage in the market of new units for middle-class sectors. “It is essential to develop effective policies to encourage the construction of affordable housing and address housing needs,” the report concluded.
www.buysellba.com
Source:
Sin la Ley de Alquileres, la oferta de departamentos se triplicó en la primera mitad del año en CABA
Informe analizó el comportamiento post DNU que derogó la ley de 2020 y que había sido reformada en octubre último. Cuáles son los departamentos que más se expandieron en el mercado
www.infobae.com
July 23, 2024
The report analyzed the behavior after the DNU that repealed the 2020 law and that had been reformed last October. Which departments expanded the most in the market?
By Jose Luis Cieri
The expansion of the offer has made it possible to generate more rental contracts in CABA since the DNU has been in force, until the end of the year contract extensions dominated (Illustrative Image Infobae)
The repeal of the Rental Law through the Government's DNU had a direct impact on the rental market. On the main real estate portals, the number of publications grew and prices began to slow down in a context of rising inflation. Currently, there are an estimated 16,000 apartments for rent in the city of Buenos Aires.
A private report based on data from the General Directorate of Statistics and Census of the Buenos Aires City Government showed that in just 6 months, the supply of apartments for rent tripled in the city compared to last November. According to data obtained from Argenprop, the supply of rentals, measured in surface area (square meters), grew by 226% compared to November.
The Tejido Urbano Foundation (also supported by statistics from Federico González Rouco , an economist and expert in the sector), maintains that this increase was not homogeneous. There was a greater growth in the published supply of studio apartments, which grew by 331% between May and November. The number of 1-bedroom apartment grew by 302%, the number of 2-bedrooms apartments by 228%, and the number of 3 and 4-bedrooms apartments by 41 percent.
“The increase was greater in small units, which may include the return to traditional rental of units that were offered for temporary rent, since they are usually the most in demand. In terms of access to housing, this is good news, because small units are the cheapest and, consequently, the most accessible,” Fernando Álvarez de Celis , executive director of Tejido Urbano, told Infobae.
Rentals in 2024 (Source: Federico González Rouco with data from the General Directorate of Statistics and Census of the Buenos Aires Government and Argenprop)
The work highlighted that until December, rents were regulated by two national laws: 27,551 of 2020 and 27,737 of 2023 (a reform that was applied in October and only in force for less than three months). Broadly speaking, these laws defined how the rental price should be updated (Lease Contract Index, ICL or Casa Propia, both well below inflation), how often (annually or semi-annually) and for what period (3 years). Although there were other issues, these were the main regulations on the residential rental market.
According to Tejido Urbano, this was supposedly good news for the owners, as it allowed them to sign contracts in which the price did not lose out to inflation constantly, but also for the tenant, because it allowed initial prices to drop and, with this, one of the main barriers to entry.
Departments
In terms of access to housing, it is positive that the supply has tripled in CABA. Estimated by type of property, the number of units grew more than the surface area, mainly in small properties. The number of units grew by 260% in the first 6 months of the DNU.Prices fell sharply, consistent with the increase in supply. It is important to look at the total cost of the contract, not just the initial price.
The average values of 1, 2 and 3-room properties fell 39% in real terms, mainly between December and February. Initial prices are reaching a new equilibrium, being lower than that of the 2020-2023 period, affecting affordability. In November, the average initial rent in CABA represented 75% of an average salary, rising to 79% in December due to inflation and devaluation, according to the Tejido Urbano Foundation.
Prices in Buenos Aires (Source: Federico González Rouco with data from the General Directorate of Statistics and Census of the Buenos Aires Government and Argenprop)
From January through April, starting rents barely rose , while wages rose more than rents but less than inflation. In April, the average rent represented just over 50% of an average wage. While still high compared to the 2011-2021 average of 40%, wages are expected to continue to gain ground on rent.
According to the Scalabrini Ortiz Center for Economic and Social Studies (CESO), in June, the average values of the departments were as follows:
- Studio apartment: $330,000. Monthly variation: 3.1%. Year-on-year variation: 200%
- 1-bedroom apartments: $400,000. Monthly variation: 5.3%. Year-on-year variation: 207.7%
- 2-bedrooms apartments: $550,000. Monthly variation: 0.0%. Year-over-year variation: 205.6%
Álvarez de Celis said: “The rental market has an initial problem: profitability in dollars is low and the cost for tenants is high. The equilibrium will always be unstable and regulations inefficient. However, the increase in supply and the drop in prices in real terms is good news.”
Future and mortgage loans
The rental market is expected to continue to tighten over the next six months. Monitoring the evolution of supply and demand is crucial.Álvarez de Celis added: “Tax incentives for landlords offering long-term contracts with moderate increases could improve affordability and provide stability for tenants and landlords.”
The launch of mortgage loans offers an opportunity for tenants with savings capacity. However, there is a shortage in the market of new units for middle-class sectors. “It is essential to develop effective policies to encourage the construction of affordable housing and address housing needs,” the report concluded.
www.buysellba.com
