The absolutely broken mortgage loan market, the significant lack of supply and inflation that continues to grow, did nothing more than generate a lethal combo for the housing rental market. All this meant that today this activity is not profitable for the owners, but at the same time it is increasingly difficult for the tenants.
Inflation forecasts for the rental segment mark, today, that during 2022 it will reach 55%, although with the peculiarity that they are already beginning to observe that this figure will be delayed. Thus, there is already talk of “a minimum” of 60%, so it would be “accompanying general inflation or even a couple of points above it.”
In tune with this, a work carried out by the real estate portal Zonaprop marks this problem. He maintains that the price of rentals in the City of Buenos Aires increased by 57% in the last 12 months, that is, above the 55.1% marked by the Indec for general inflation.
Always according to this survey, last April prices increased 6.3% in April compared to March, thus closing the first quarter at 21.2%, similar to inflation.
In this more than important price movement that is seen on the horizon, inflation and the discussion about what is expected to be a new Rental Law are key.
“Today there is no offer. There are very few owners with the intention of putting their apartments on the rental market. Those who can have it ‘stopped’ and afford the expenses that this generates, prefer it to everything that having a tenant represents, and in return of a really low profitability, and it does not exceed 2%,” the president of the Argentine Real Estate Chamber (CIA), Alejandro Bennazar, told NA.
This low supply that the manager is talking about is later reflected in the fact that demand exceeds availability, which raises prices.
Jorge Toselli, in charge of JT Inmobiliaria, paints a picture similar to that of Bennazar. “The available properties are few. Those who have them free, wait for the new law to appear, because the conditions set forth by the current regulation do not convince anyone. There are a lack of units because people do not put them on the market; and the few that exist They rent very quickly.
All this leads to the fact that today the waiting lists have returned to some real estate agencies, with candidates who must compete to see who gets one of the few free properties.
The result of this is also that those who want to enter a home must overcome the conditions that are requested to rent, which in many cases, and given the large number of interested parties, are raised by owners and real estate agents taking advantage of waiting lists.
This also extends to prices. In times of greater supply, those interested in becoming tenants had the possibility of trying to lower the published values, knowing that this margin existed. Today that option not only does not exist, but also complicates the situation of those who today rent a home, but who do not agree -or simply do not have the financial resources- with the values that are requested to renew the contract, they must look for another option to live.
And this also leads to more and more cases of tenants who must lower their claims and, for example, go from a three-bedroom to a two-bedroom, of course because they cannot afford the price increases.
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