The situation of the real estate market in Buenos Aires was completely modified after the repeal of the Post-DNU Rental Law of the current Government. This change led to a 166% expansion in the supply of departments in the Autonomous City of Buenos Aires from the end of the year to the present, according to the Statistical Observatory of the Sector of the Buenos Aires Real Estate College.
The properties of three environmentswhose rents average $500,000 monthly, They take longer to rent, sometimes remaining on the market for more than fifteen days.
A crucial aspect in the dynamics of the segment is that Now there are options in pesos in all neighborhoods of CABA, in contrast to December 2023, when there were no apartments available for a typical family. with a child in neighborhoods such as Agronomía, Parque Patricios or Monserrat, among others.
According to Soledad Balayan, from Maure Inmobiliaria, tenants now have more options to choose from, allowing them to take more time to decide without the fear of losing the desired property. “The greater supply means that what used to be rented in a week can now take more than a month,” she says.
How quickly some properties rent depends on various factors. The most convenient rental conditions for the tenant, such as agreed adjustment rates and adjustment periods, as well as the acceptance of various types of guarantees and pets, facilitate the rental.
“However, From the landlord’s perspective, there may be no urgency in renting quickly, instead prioritizing a suitable tenant profile. In addition, additional costs such as expenses, AYSA and ABL can influence the tenant’s decision,” Balayan added.
Real estate sector experts agree that rental prices for homeowners are on the decline.
Changes in the real estate market
Since the DNU has been in force, owners prefer to offer their homes in pesos and interest in temporary rentals has decreased. According to the economic consulting firm PxP, 63% of the offer is in pesos, 36% in dollars and the remaining 1% is “to consult.”
Another phenomenon that is occurring is that The values fell for the starting point of the contracts after increases that exceed 250% year-on-year. The Observatory also confirmed that housing rental prices are declining in real terms, increasing below the rate of inflation. From January to April 2024, the average drop was 34%. In some contracts, nominal decreases in rental values are already observed.
Diego Frangella, head of the Real Estate College, exemplified: “Housing rental prices are falling. For example, a 2-room apartment in Monserrat (located on Hipólito Yrigoyen at 600) was offered for $363,000 and was finally rented for $270,000. In December they asked for $220,000, which represents an adjustment of 22.7%, that is, 22.1% below the Consumer Price Index (CPI) accumulated until March.”
Apartments: from desperation to falling prices
In the portals it is beginning to be evident that there are properties that have a “sign” that says “It lowered its price.” Until last October, when the Rental Law of 2020 governed agreements, a property was rented even without its tenants seeing it in advance.
Now there is more offer and They take up to 20 days to rentand there is also great negotiation between parties based on the DNU that allows free agreements between parties.
The most used conditions in housing lease contracts are agreements in pesos and for 24 months., those preferred by the parties. “Tenants and owners are mostly agreeing on contracts for 24 months, in pesos, with quarterly adjustment using the CPI or the Lease Contract Index (ICL),” Frangella clarified.
With more options available, renters today are taking more time to analyze and visit several properties before deciding.
Since last December 29, the rental market in CABA changed noticeably. The day before the implementation of the DNU there were 486 housing properties on offer in the city. At the beginning of January, on a Tuesday, the first business day of the year, the number had increased to 2,500. Today, that offer has risen to 19,000 properties available for rent.
Armando Pepe, a reference in the real estate market and one of the founders of the Argentine Real Estate Chamber, explained: “The reason why some properties are rented faster than others is due, firstly, to the condition of the property and, secondly, to the amount of expenses (according to the ConsorcioAbierto platform in April they rose almost 22% and average $113,800 in CABA). Expenses are essential when renting a home. “Tenants are taking more time to decide because salaries have been greatly delayed.”
Today, as an example in Buenos Aires, a rent of $300,000 pesos also implies an additional expense of $300,000 for the deposit and move, adding up to $600,000 in total.
Pepe adds: “For this reason, tenants first choose units that are in good condition, that have reasonable expenses and that are close to their current place of residence, work or children’s school. The prices are going down. At the beginning of December, there were no two-bedroom apartments in the city for less than $500,000. Today, you can find two-bedroom properties in neighborhoods like Congreso and downtown, and other sectors, with prices from $240,000 to $300,000 per month.”
In different neighborhoods of the city, such as Palermo and Recoleta, Values have continued to decrease for both one-, two- and three-bedroom apartments. Today, it is possible to find units from $200,000. “This panorama shows a clear downward trend in rental values, allowing tenants a greater capacity for choice and negotiation,” Pepe said.
Departments and neighborhoods with the most offer
94.82% of the offer are apartments according to the Buenos Aires Real Estate College. Then followed by PH and houses with 3.3% and 1.9%, respectively.
Currently, there is a notable decrease in the interest of owners in temporary rentals
The 6 neighborhoods with the greatest offer are Palermo, Belgrano, Recoleta, Caballito, Puerto Madero and Villa Urquiza. These neighborhoods explain 58.51% of the total offer (average across different portals). Palermo was the neighborhood with the greatest growth in supply last month, with an increase of 16.82%. In CABA, the supply increased by 13.83% in the last month.
Tenants take their time to decide
The behavior of potential tenants has also changed. With more options available, they take more time to analyze and visit several properties before deciding.. This additional time allows for a more thoughtful decision with less pressure.
The economic downturn and homeowners’ resistance to adjusting prices also play a role. In some cases, owners prioritize renting quickly and lower the price if the property does not receive visitors.
“Other owners fear that prices will not keep pace with inflation, which makes them more reluctant to lower prices and make conditions more flexible. As inflation decreases and wages regain their purchasing power, the market is expected to stabilize“Balayan concluded.
