The repeal of the rental law through the DNU of the president Javier Milei once again impacted the property rental market, in this case deregulating ita historic order from real estate and the ownersalthough highly criticized by tenants.
This caused the supply to reappear, which had hit historic lows in recent months. However, what is the impact on prices?
From the Chamber of Owners of the Argentine Republic (Capra) They allege a drop in rental prices, although since Scalabrini Ortiz Center for Economic and Social Studies (Ceso) they point out the opposite. How is the market self-regulating?
The lawyer specializing in Real estate law and president of Capra, Enrique Abattihe assured in dialogue Ambit that the rental supply foresees a substantial increase, which led to prices “decrease on average 20% in some neighborhoods”.
During the first weeks of January and after the repeal of the current regulations that regulated the rental market, The offer increased substantially: according to Zonaprop a 16% increase is already observed.
But just with the increase in supply, is it possible that there will be a drop in prices? Despite this phenomenon, which has not really occurred since the enactment of Law 27,551, and which can be seen on rental platforms, the economics graduate and member of Ceso, Virginia Brunengoin dialogue with this medium, stated: “Our statistics indicate the opposite, the steep increases continue”.
Rentals in CABA: substantial increase in supply
Abatti He described the level of supply that existed prior to the rental law. Before the implementation of the rule, he recalled that in CABA there were between 15,000 and 20,000 rental homes. However, after July 1, 2020 it went down “drastically” and six months ago a balance of 1,300 was reached, less than the 10% that existed in 2020.
But that was not the minimum, in October of last year the rule was modified and the drop was even greater: “We had an offer of 30 homes in one month”stated the lawyer specialized in Real estate law. Now, with the entry into force of DNU 70/2023which gave “greater freedom in contracts”, the number of rental properties rose to 7,800 in CABA until January 12.
“In these times of greater supply, the tenant is the biggest beneficiary. The rental price is dropping by up to 20% in some neighborhoods and tenants have a greater opportunity to negotiate”, he highlighted. Although in contrast, Brunengo, de Ceso pointed out that “The price could always be negotiated”.
Rentals in CABA: How is the market self-regulating?
Market deregulation included substantial changes, not only eliminating the law, but also reforming the Civil and Commercial Codeso currently the market is not even as prior to the norm, but more “free.”
“We are seeing a worsening of contractual conditions to the detriment of tenants”he emphasized Brunengowho also added that “each landlord does what he wants”, in reference to the fact that the terms of the contracts were shortened since the update rate is not in line with that of salaries.
The excesses in contractual conditions They were already a warning that he had previously made Gervasio Muñoz, of Grouped Tenants. “There are increases in renewals of 500 or 600%, contracts for 3/6 months or 1 year and monthly up to four-monthly increases tied to inflation,” he highlighted.
A tenant He told this media that he had to renew a lease, which had really fallen behind –For a studio apartment I paid $80,000 in the Villa Crespo neighborhood-, but to renew the contract they asked him to raise the cost to $300 per month ($354,000 in blue, therefore a 342.5% increase) and update the deposit by that value. Furthermore, since the agreements are paid in the agreed currency, it had to be dollar billto which there is currently access only in the parallel market either MEP.
Source: Ambito
