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After Milei's DNU: Due to the increase in the supply of apartments for rent, the rules of the game change for owners - La Nacion Propiedades
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Tras el DNU de Milei: por el aumento de la oferta de departamentos para alquilar cambian las reglas de juego para los propietarios
A menos de un mes del DNU, la oferta de propiedades en alquiler aumentó más del 50% en los primeros 20 días de enero y los dueños de los departamentos tienen que recalcular
www.lanacion.com.ar
January 25, 2024
Less than a month before DNU, the supply of rental properties increased more than 50% in the first 20 days of January and apartment owners have to recalculate
By Candelaria Reinoso Taccone
The supply of rental properties went from 5,495 units on January 2 to 8,253 apartments on the 23rd of this month.
What you have to know
- The number of properties for rent in the city of Buenos Aires increased by 50% in the first 20 days of January, following the implementation of the DNU that repealed the rental law and allowed greater flexibility in contract negotiations.
- The increase in supply can be attributed to the new freedom that parties have to apply different adjustment rates and terms, as well as choosing the contract period that best suits their needs.
- Specialists consider that this is an opportune moment for owners, since they can obtain better prices now than in the future, when there will be more competition and tenants will be able to demand more conditions. However, the largest increase in supply is expected to be seen only in approximately six or seven months.
This summary was carried out by artificial intelligence under the supervision of LA NACION editors.
The Government's Decree of Necessity and Urgency (DNU) marked a significant change in rents, a distorted market in which finding an apartment at a reasonable price is almost an odyssey.
Today, less than a month after the implementation of the DNU, which repealed the rental law and enabled absolute freedom when negotiating contracts, the supply of rental properties in the city of Buenos Aires increased by 50% in the first 20 days of the year.
In concrete numbers, the supply went from 5,495 units on January 2 to 8,253 on the 23rd of this month . Among the typologies, the two rooms led the increase with 68% , followed by the studio apartments with an increase of 60%. The three rooms experienced an increase of 48%, the four rooms 28%, and units with five or more rooms grew by 5%, according to data analyzed by Soledad Balayan, owner of Maure Inmobiliaria, based on Zonaprop publications.
The two-room apartments increased from 1,800 published units to 3,033 in 20 days.
However, these data take on even greater importance when considering seasonality, since January is generally characterized as a “stop” month for the rental market . The notable increase in supply could be attributed to the new flexibility that the parties involved have to apply various indices and adjustment periods , as well as the freedom to choose the contract period that best suits their needs.
“We experienced a notable increase, going from zero rentals to a total of 11, with three of them in an advanced process. In some cases, we had to reduce prices in pesos due to the lack of enough visits ,” says the real estate agency. It is important to note that January is not a favorable month for searching for rentals, since most people are on vacation. “Although supply grew in the first weeks of the year , demand has not yet reached the same level,” says Balayan.
Regarding prices and the formalization of contracts, he assures that, despite the greater number of traditional rental advertisements, it is difficult to statistically determine how many of them correspond to two-year contracts . “To do this, it is necessary to analyze each advertisement in particular, since there is no filter that allows segmentation by contract conditions. In our case, we observe that two-year contracts with quarterly adjustments are once again being opted for. The flexibility is so broad that each case is very particular. The same goes for prices, since most of our traditional rentals are handled in pesos. In addition, we will have to wait for the new Zonaprop report to evaluate whether the proportion of advertisements in pesos versus dollars has changed,” says the specialist.
After the DNU, experts point out that owners will stop resorting to the system of renting their apartment to relatives and acquaintances.
Federico González Rouco, economist on the team at Empiria, Hernán Lacunza 's consulting firm , brings another issue to the table: “The accessibility of the housing rental supply.” He refers to the fact that now the apartment owners are going to stop resorting to the system of renting their apartment to relatives and acquaintances . “That offer may possibly return to the real estate agencies,” he clarifies. However, he believes that the DNU minimizes or reduces any possibility of risk for owners, but not for tenants who will feel more protected with good regulation.
Specialists talk about the opportunity to seize the moment . In this sense, Enrique Abatti, president of the Chamber of Property Owners of the Argentine Republic, anticipates that the greatest increase in supply will only “be seen in approximately six or seven months.” This is why the owner can now get a better price than in a while , where there will be more competition, and where the tenant will be in a position to demand more conditions.
In CABA, rents experienced an annual increase of 260% during 2023, 2.65 times more than in 2022.
The change occurs in a context where price increases found no limit.
During the last month of 2023, the cost of renting an apartment in the city of Buenos Aires experienced an annual increase of 260% during 2023 (2.65 times more than in 2022), with a monthly variation of 18.6% , according to the latest Zonaprop report. For reference, the same two-bedroom unit that was rented for almost $40,000 in July 2021 is now being offered for almost $335,000 per month.
In numbers, a 40 m² studio apartment located in the Federal Capital is already rented for $280,260 per month, while a 50 m² two-room apartment reaches $334,888. Meanwhile, a three-room, 70 m² property has a monthly price of $463,301.
In the city of Buenos Aires, there are already ten neighborhoods in which renting a two-bedroom does not cost less than $400,000.
The neighborhoods with record increases stand out Palermo , considered the most expensive to rent, with a monthly value of $491,737: almost half a million pesos for a two-room apartment. “There is a high demand in general, although, naturally, it varies between the different subsectors of the neighborhood” comments José Rozados, co-founder of Reporte Inmobiliario.
The ranking of the most expensive areas to rent two rooms is completed with Belgrano , just below Palermo: a two room costs $487,654 and Núñez with values around $477,163.
A no small fact that reflects the same report is that there are ten neighborhoods in the city of Buenos Aires in which renting a two-room apartment does not go below $400,000:
- Chacarita ($475,151)
- Retirement ($458,284)
- Recoleta ($450,766)
- Schoolchildren ($446,072)
- Saavedra ($436,812)
- Coghlan ($425,754)
- Villa Urquiza ($420,953)
In contrast, Liniers is presented as the most affordable neighborhood , with a monthly rent of $273,253, followed by Monte Castro and Floresta, with costs of $284,809 and $288,139, respectively. On the other hand, Saavedra and Núñez are positioned as the neighborhoods with the greatest year-on-year increase with records that average 347%.
What will happen to temporary rentals
In December 2022, the occupancy of the temporary apartments was 75%, while in December 2023 it was 60%.
Until a month ago, the rules of the real estate market led many owners to opt for temporary rentals due to the lack of regulation. However, after the DNU, a change in the scenario is expected , with owners considering returning to traditional long-term rentals. Before the DNU, temporary rentals offered a higher profitability, but with the regulatory change, an adjustment is expected.
According to a study by Monitor Inmobiliario, in November 2023, the gross monthly income from a temporary rental was US$694, while the traditional one was US$312 . The attraction of the temporary business lay in the possibility of charging in dollars, something previously not permitted by law.
Before DNU, traditional rentals presented risks, such as long-term contracts with insufficient adjustments for inflation. This led to a 60% increase in short-term rentals in the last year . Now, with the possibility of closing contracts in foreign currency and greater flexibility in contractual terms, owners are expected to return to the traditional market.
In November 2023, the gross monthly income from a temporary rental was US$694, while the traditional one was US$312.
“Perhaps, before the repeal of the rental law, the only alternative to making a sustainable income was temporary. However, the traditional one can be traditional now too. I think there will be a greater supply of traditional rentals. Many people who know the great work involved in doing a temporary job decide not to do it and prefer to return to the traditional one,” anticipates Daniel Bryn, director of Invertire.
Another factor that could keep owners from allocating their apartments to temporary rentals is that occupancy is not fixed throughout the year, but varies according to seasonality. In that sense, Bryn explains that, in the last month, temporary rentals For tourist purposes they found themselves with 60% occupancy . “That is to say that there were 12 days a month, on average, that they were unoccupied . We went down from December 2022, which was 75% occupancy, to 60% in December 2023. That is related to the amount of supply,” he concludes.
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