After the repeal of the “Rental Law” Through the Decree of Necessity and Urgency (DNU) which the president signed Javier Mileithe uncertainty of the tenants about how to agree contracts after the deregulation and the possibility that each agreement is “unique and unrepeatable”.
Inside of the DNU of the government of Freedom Advances (LLA)in addition to repealing the rule that regulated rental contracts, the Civil and Commercial Code -was the regulatory framework for contracts prior to the law- and provides a “freedom of contract”which implies that the owner and the tenant can be “free” from “enter into a contract and determine its content”.
Rental contracts: currency, duration and updating proposed by real estate agencies
Different market players agreed that the new rental contracts “to a large degree” “they are agreeing”for two years, in pesos and with indexations through the Consumer Price Index (CPI)”, which measures the National Institute of Statistics and Censuses (INDEC).
Although Armando Pepe, owner of the homonymous real estate company, highlighted in dialogue with Ambit that “There are still many owners who ask that the rent be agreed in dollars.” Anyway, he reflected: “People earn in pesosso they will have to change the currency to peso or wait.
For his part, a user of the social network x (ex Twitter) said that he had six empty apartments and that, with the change in regulations, he decided to offer them again on the rental market with two-year contracts and indexations through Purchasing Value Unit (UVA).
“Although for the moment each agreement will be differentwith the passage of time, they will exist model contracts with standard market clauses“said the president of the Argentine Real Estate Chamber (CIA), Ivan Genevawho also highlighted that the organization is providing models to partners.
The now repealed rental law established that contracts have a minimum of 3 yearswith semiannual updates through a coefficient made up of the smallest variation that arose from the comparison of the average of 0.9 of the Salary Variation Coefficient (CVS)published by INDEC and of Reference Stabilization Coefficient (CER)published by Central Bank of the Argentine Republic.
Rentals: deregulation boosted supply
The different members of the market agreed that “supply grew”. In that sense, the president of the Unique College of Real Estate Brokers of the city of Buenos Aires (CUCICBA), Marta LiottoIn dialogue with this media, he emphasized: “We were not wrong in what we were proposing, more supply was necessary for values to begin to be accommodated”.
In that order, Zonaprop specified that In the last two weeks of December and the first of January, a 9% increase in supply was observed on its portal. While Pepe added that “Until Friday, January 5, we had 2,000 units on offerwhich is a lot considering that a month ago there were only 30/40 units.”
“To the increase in supply, We must add that the owners who already had properties on offer are now willing to resign locative value because they can negotiate the rest of the contractual conditions according to their particular interest and not subject to certain guidelines”,
However, the owner of Grouped Tenants, Gervasio Muñozcontradicted the analysts and pointed out that from the market “they seek to establish that supply increases and? The contracts are for 2 years with quarterly increases. But the situation that exists in real life is dramatic.”
In that sense, he added that price increases for renovations they are “around 500%/600%” and the contracts are for “3/6 months or 1 year with monthly indexations, up to four-monthly, tied to inflation“. About the offer of properties in dollarsMuñoz stressed that “updated at 10% annually“.
Another fact was that according to the organization, real estate agencies were observed “They start asking for a year’s rent in advance“, which is exaggerated, since beyond what can be agreed between parties, the advance of one year’s rent for a studio apartment would be $3,363,120starting from a monthly cost of $280,260, as reported by Zonaprop as the CABA average.
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Prices. The neighborhoods of Olivos and Nordelta are those with the most expensive offer in the north of Greater Buenos Aires.
Behind the repeal of the rule and the positive aspects they claimed such as increase in offerfrom the CIA stressed that “we must take into account that This solution is not immediate, nor does it solve the problem of lack of access to housing“. Likewise, they attributed the difficulty of paying the rent to “a phenomenon of the Argentine economy”which is related to the drop in purchasing power.
“We are convinced that this reform will energize the market and increase the supply of properties, allowing renting to be a little easier for everyone,” Geneva concluded.
However, this week a report from the consulting firm Sentimientos Públicos was released that recognizes that 55% of those surveyed are in favor of state regulation for rentals. and only 34% did so in favor of market self-regulation.
Source: Ambito
