The end of the Rental Law generated an almost immediate impact on the real estate market. Since the repeal of Javier Milei's DNU came into effect, the supply of apartments in the City of Buenos Aires has already doubled, according to data from the Argentine Real Estate Chamber (CIA), and prices have already dropped, so far, by 20 %, say the brokers in the sector.
The Rental Law died in Argentina: the supply of apartments in CABA has already doubled and prices have fallen.
Source: Archive
The end of the Rental Law generated an almost immediate impact on the real estate market. Since the repeal of Javier Milei's DNU came into effect, the supply of apartments in the City of Buenos Aires has already doubled, according to data from the Argentine Real Estate Chamber (CIA), and prices have already dropped, so far, by 20 %, say the brokers in the sector.
According to data from the chamber, in 2023, the supply of apartments for rent in CABA had plummeted, to just over 400 units available. "In December, after Milei's announcement, that number doubled. Today, we have a stock of more than 800 apartments and it is growing day by day," explained Alejandro Bennazar, director of Institutional Relations at the CIA.
The greater supply, together with the possibility of freely negotiating between parties - a key change, since the defunct law established a semiannual update by an official index - had an effect on prices. "If the update is monthly, no matter the adjustment index used, rental prices were reduced from 20% to 30%, compared to the values of November and December," explained Daniel Salaya Romera, owner of the homonymous real estate company with a large presence in the North Zone.
"If the contract is signed with bimonthly adjustments, the values decrease, on average, 15% compared to December," he explained.
In the last two months, prices had strong distortions and reached historical values, with an average increase of 40% above inflation in 2023, which was 211.4%, the National Institute of Statistics and Censuses (Indec) announced on Thursday. Thus, as of December, an average of $334,888 per month was paid for a two-bedroom in Capital, according to Zonaprop.
"It is not surprising that, in many cases, values fall even in an inflationary context. What we notice, in general, is that prices stagnated, something that did not happen years ago," observed Iván Ginevra, president of the CIA.
Furthermore, very far from what happened just a few weeks ago, when 60% of the offer was in dollars, today, the majority of contracts are made in pesos. "The expectation is that inflation in pesos will exceed the increase in the dollar this year," explained Daniel Bryn, owner of Invertire Real Estate.
The dollarization of contracts that existed until December is slowly beginning to be reversed: agreements are being signed in pesos, with quarterly updates.
"Many properties for rent that were published in dollars, when converted to pesos, did so at a reduction, to accommodate the demand that exists today," he added.
The New Strategies
The counteroffers now reached the rents. "This practice is used in the annual advance payment. Something that, before, could not be done because the repealed law prevented it," described Salaya Romera.
"For example, in the case of a three-room apartment, with 100 square meters, brand new in Vicente López, furnished and equipped, 35% less was negotiated for a year's advance payment," she said.
Currently, each negotiation is particular. The Decree of Necessity and Urgency (DNU) that came into force on December 29 annulled the Rental Law and reestablished the Civil Code as its regulatory framework.
"There is good acceptance by tenants and owners. Prices will continue to adjust downwards, and new payment methods will emerge, which will adapt to the needs of each tenant and owner," concluded Salaya Romera.
For Adrián Cyderboim, owner of the Crecer real estate agency in Villa Crespo, activity increased sharply in the last week, with prices that, in most cases, remained stable or even fell, compared to December.
"There are many owners who have their properties for sale. But they are waiting for the scenario to become clearer and for prices to recover, so they decide to rent the property," he explained.
"At the end of December, we did not have rentals in the real estate agency. Today, we offered them again. The offer grows week by week," she exemplified.
This article was originally published in Spanish in El Cronista.
