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Without the Rental Law, the supply of studio apartments in Buenos Aires grew by 550%. How much should a tenant pay per month?
Source:
www.infobae.com
March 20, 2025
This was indicated by a private report, which also recorded strong growth in the supply of one-bedroom apartments. How much of the income is allocated to rent and what impact do periodic increases have?
Studio apartments tend to attract young tenants due to their lower cost and smaller size (Illustrative Image Infobae)
Fourteen months after the repeal of the Rental Law, the number of rental properties in the city of Buenos Aires has grown by more than 340%, and initial rental prices have dropped in real terms, according to a private analysis. However, access remains difficult for thousands of tenants.
The elimination of the regulations led to significant changes in the real estate market. With more flexible deadlines and contract updates, the number of rental properties increased considerably, according to data from the Tejido Urbano Foundation , which conducted the research.
The recovery in supply was largely due to the decision of hundreds of property owners to return to the formal market, after having withdrawn their properties during the period under the previous regulations.
Fernando Álvarez de Celis , Executive Director of the Tejido Urbano Foundation, explained that the measure met the government's objectives: "The repeal of the law has increased the rental market and lowered rental prices below inflation. This is because landlords have returned their properties to the formal market. One of the main issues resolved by the repeal is reducing the length of the contract and eliminating annual indexation, two points welcomed by landlords."
The supply of studio apartments grew 550%, while the supply of one-bedroom units increased 430%; together, these apartments doubled their share of the rental market.
Source: Chart based on data from economist Federico González Rouco, the consulting firm Empiria, the Institute of Statistics and Census of the Autonomous City of Buenos Aires and Argenprop
Three-bedroom units also experienced an increase, although to a lesser extent (307%), while properties with four or more bedrooms grew by 143%. Furthermore, since fewer of these types of properties have been built in the last 25 years, it is difficult to find them for rent on various specialized portals.
Despite the growth in supply, conditions for homeowners are not uniform in all areas of the city of Buenos Aires.
In neighborhoods with higher demand, initial listing prices remain higher, while in areas with less market pressure, prices have been adjusted more downward. In neighborhoods like Palermo and Recoleta, starting rents for one- and two-bedroom apartments exceed $400,000 per month.
This created differences in the negotiation dynamics between owners and tenants, depending on the location and characteristics of the property.
In real terms, the average rent for studio and two-bedroom apartments in 2024 was 26% lower than in 2023, while that for three-bedroom units fell 22%, according to the work. However, this decline did not translate into greater affordability due to periodic contract adjustments.
Source: Chart based on data from economist Federico González Rouco, the consulting firm Empiria, the Institute of Statistics and Census of the Autonomous City of Buenos Aires and Argenprop
“The income-to-rent ratio remains a problem. Generally speaking, it represents more than 35% of an average salary. Although the initial price has dropped, contracts are typically updated every three months due to inflation, which makes rent more expensive over time,” explained Álvarez de Celis.
As a result, hundreds of tenants opted to move to more affordable units, generating greater turnover within the market.
The increased supply gave tenants more options to renegotiate or change their home in search of better conditions.
Source: Chart based on data from economist Federico González Rouco, the consulting firm Empiria, the Institute of Statistics and Census of the Autonomous City of Buenos Aires and Argenprop
As for renters, while the increased supply has expanded options, the challenge is economic. Mortgages have emerged as an alternative for some, although the number of people who have been able to access financing for home purchases is low compared to the number of renters in the market.
Another aspect to consider is the evolution of additional rental costs, such as utilities ( which have only recently decreased slightly after 18 consecutive months ) and services. In many cases, these expenses represent a considerable percentage of the tenant's income, which impacts the decision to move or stay in a home. The change in utilities has been a key factor in the perception of the total rental cost, especially in buildings with services and amenities.
"The rules are in place. They're the ones that have historically existed in this market, and the players are familiar with them," said Álvarez de Celis. This means that no abrupt changes in contract terms are expected, although inflation and the macroeconomic situation will determine tenants' ability to pay.
The main challenge going forward will be to consolidate the growth in supply without creating new difficulties for tenants.
Álvarez de Celis concluded: "The combination of factors such as inflation, wage levels, and economic stability will determine whether regulatory flexibility can translate into more equitable and sustainable access to rental housing."
www.buysellba.com
Source:
Sin Ley de Alquileres, creció 550% la oferta de monoambientes en Buenos Aires: cuánto debe pagar un inquilino por mes
Así lo indicó un informe privado, que también registró un fuerte crecimiento en la oferta de departamentos de dos ambientes. Cuánto del ingreso se destina al alquiler y qué impacto tienen los aumentos periódicos
www.infobae.com
March 20, 2025
This was indicated by a private report, which also recorded strong growth in the supply of one-bedroom apartments. How much of the income is allocated to rent and what impact do periodic increases have?
Studio apartments tend to attract young tenants due to their lower cost and smaller size (Illustrative Image Infobae)
Fourteen months after the repeal of the Rental Law, the number of rental properties in the city of Buenos Aires has grown by more than 340%, and initial rental prices have dropped in real terms, according to a private analysis. However, access remains difficult for thousands of tenants.
The elimination of the regulations led to significant changes in the real estate market. With more flexible deadlines and contract updates, the number of rental properties increased considerably, according to data from the Tejido Urbano Foundation , which conducted the research.
The recovery in supply was largely due to the decision of hundreds of property owners to return to the formal market, after having withdrawn their properties during the period under the previous regulations.
Fernando Álvarez de Celis , Executive Director of the Tejido Urbano Foundation, explained that the measure met the government's objectives: "The repeal of the law has increased the rental market and lowered rental prices below inflation. This is because landlords have returned their properties to the formal market. One of the main issues resolved by the repeal is reducing the length of the contract and eliminating annual indexation, two points welcomed by landlords."
The offer: more units on the market
One of the most notable effects of the repeal was the reappearance of rental units, particularly in the most sought-after segments.The supply of studio apartments grew 550%, while the supply of one-bedroom units increased 430%; together, these apartments doubled their share of the rental market.
Source: Chart based on data from economist Federico González Rouco, the consulting firm Empiria, the Institute of Statistics and Census of the Autonomous City of Buenos Aires and Argenprop
Three-bedroom units also experienced an increase, although to a lesser extent (307%), while properties with four or more bedrooms grew by 143%. Furthermore, since fewer of these types of properties have been built in the last 25 years, it is difficult to find them for rent on various specialized portals.
Issues to be resolved
This phenomenon was due to two main factors. First, the decline in the supply of short-term rentals, which had captured a share of the market in recent years, but whose demand declined in 2024, the report noted. Second, the difficulty young people have in covering rental costs, which reduced their participation as renters.Despite the growth in supply, conditions for homeowners are not uniform in all areas of the city of Buenos Aires.
In neighborhoods with higher demand, initial listing prices remain higher, while in areas with less market pressure, prices have been adjusted more downward. In neighborhoods like Palermo and Recoleta, starting rents for one- and two-bedroom apartments exceed $400,000 per month.
This created differences in the negotiation dynamics between owners and tenants, depending on the location and characteristics of the property.
Lower prices, with frequent adjustments
The increase in supply moderated initial prices, but with the DNU, most agreements are adjusted quarterly or four-monthly, representing a challenge for wage earners who have not yet managed to recover from the drop in income due to accumulated inflation over the last 18 months.In real terms, the average rent for studio and two-bedroom apartments in 2024 was 26% lower than in 2023, while that for three-bedroom units fell 22%, according to the work. However, this decline did not translate into greater affordability due to periodic contract adjustments.
Source: Chart based on data from economist Federico González Rouco, the consulting firm Empiria, the Institute of Statistics and Census of the Autonomous City of Buenos Aires and Argenprop
“The income-to-rent ratio remains a problem. Generally speaking, it represents more than 35% of an average salary. Although the initial price has dropped, contracts are typically updated every three months due to inflation, which makes rent more expensive over time,” explained Álvarez de Celis.
As a result, hundreds of tenants opted to move to more affordable units, generating greater turnover within the market.
The increased supply gave tenants more options to renegotiate or change their home in search of better conditions.
Conditions for owners and tenants
From the landlords' perspective, the elimination of contract restrictions provided greater predictability. By being able to adjust values more frequently, rental yields became more stable, incentivizing some investors to re-list properties.
Source: Chart based on data from economist Federico González Rouco, the consulting firm Empiria, the Institute of Statistics and Census of the Autonomous City of Buenos Aires and Argenprop
As for renters, while the increased supply has expanded options, the challenge is economic. Mortgages have emerged as an alternative for some, although the number of people who have been able to access financing for home purchases is low compared to the number of renters in the market.
Another aspect to consider is the evolution of additional rental costs, such as utilities ( which have only recently decreased slightly after 18 consecutive months ) and services. In many cases, these expenses represent a considerable percentage of the tenant's income, which impacts the decision to move or stay in a home. The change in utilities has been a key factor in the perception of the total rental cost, especially in buildings with services and amenities.
Projections for 2025
With the rules of the game now established, the rental market has stabilized, according to industry sources."The rules are in place. They're the ones that have historically existed in this market, and the players are familiar with them," said Álvarez de Celis. This means that no abrupt changes in contract terms are expected, although inflation and the macroeconomic situation will determine tenants' ability to pay.
The main challenge going forward will be to consolidate the growth in supply without creating new difficulties for tenants.
Álvarez de Celis concluded: "The combination of factors such as inflation, wage levels, and economic stability will determine whether regulatory flexibility can translate into more equitable and sustainable access to rental housing."
www.buysellba.com
