August concludes with increases of the order of 60 percent and supply continues to decline. Debts skyrocketed in expenses and services
By Patrick Eleisegui
08/25/2022 – 12:25 p.m.
The blows to the pocket of the tenants do not stop chaining and the beginning of September will be a headache for that segment again. It happens that inflation does not slow down and it is in this context that marketers anticipate a new record high in the rent adjustments scheduled for the beginning of that month. The mark, they point out, will be above the 60 percent in force during August and in the field of real estate they take it for granted that this increase will further trigger debts for expenses and services.
The increase, ahead of iProfessional from entities that represent brokers, will be of the order of 61 percent for the first fortnight of, precisely, September. But that percentage of insurance will increase during the second half of the month.
“The index will start at 60.12 percent and then it will follow the rhythm that inflation has been having. Unfortunately, the brake that continues to have the discussion around the change in the rental law continues to suffocate the tenants’ economy,” Marta Liotto, president of CUCICBA, told this medium.
Rental law, out of agenda
“The political ups and downs of recent weeks ended up completely paralyzing the discussion that had been taking place to change the law. The meetings have not been resumed and for the moment the problem remains off the agenda. Meanwhile, the supply of units continues shrinking because there is no incentive for owners“, he added.
Traders support the unified project to which the opposition arrived. Together for Change and the Federal Interblock propose two-year contracts, adjustments to be negotiated between the parties and tax incentives for the owners.
From the Real Estate Professional Association (CPI) they indicated to iProfessional that the initiative “collects the initiatives that the CPI suggested to referents of the various political forces, and that were expressed in the Project originally presented by Deputy Álvaro González (CABA) last year.”
The inflationary spiral drives the rise in rents.
“The points proposed by the CPI and the rest of the entities of the sector included in the text of the project are the return to two-year contracts, the free agreement of the updates of the amounts and the inclusion of tax benefits for the real estate intended for housing rentals,” the organization explained.
Rentals: reduced offer and indebtedness
Liotto also stated that the offer is also going through one of its most critical moments. “On average, and depending on the neighborhood, we can say that the supply of rental properties has shrunk by at least 45 percent compared to pre-pandemic levels. The rental market is going through an unprecedented crisis,” he remarked.
The board argued before iProfessional that this reduction in available units, added to the increase shown by expenses, encourages interest in investing in neighborhoods in the South of the City.
The head of CUCICBA took it for granted that the removal of subsidies and their effect on costs will deepen this trend starting next month.
The indebtedness of the tenants, affirmed Liotto, accelerated strongly this year and everything indicates that it will gain in drama between now and December. The delinquency in the payment of expenses and services that, recognized in the field of real estate marketing, doubled from previous years.
Debts for unpaid expenses increased at least 22 percent so far this year. The historical average, they commented to iProfessional from CUCICBA, it is from 10.
The removal of subsidies will further complicate the scenario for tenants.
“Families cannot afford these payments because they are not enough, they barely cover the rent amounts that are constantly rising. Something similar happens in services, with bills that are paid months after the established expiration date. This delay is a direct consequence of the adjustments that, established by current law, make payments more expensive permanently. The perspective is beyond worrying,” concluded Liotto.