The month of September starts with poses in electricity and gas services since the removal of subsidies for both services begins to take effect. For the tenants who started contracts in September, the increase in rentals will reach 64.67%. According to referents of the real estate sector, the profitability for the owners increased as a result of a drop in the value of the properties and the increase registered in rents.
The existing political and economic difficulties make it necessary to rethink the housing access strategy in Argentina, since fewer and fewer people can access real estate of a certain category. The problem today is not only about access to own housing but that there are many impediments to accessing a rental and the increases registered monthly make the situation even more difficult for tenants.
A little over two years after the sanction of the Rental Law which brought headaches for both owners and tenants, the percentages of increases in force for the month of September were announced, which exceed 60% per year. Updates to the values of the rentals They are made according to a combination of the inflation index (CPI) and the salary evolution index (RIPTE) in equal parts. In this way, every 12 months the tenants They must face a rise based on salary increases and inflation, always on the original rental value.
According to the Association of Public Real Estate Brokers of Mendoza, according to Law No. 27,551, the percentage of increase in the updating of the rentals stipulated for the month of September is 64.67%. Currently, of the 9,000 properties that are published on the Mendozaprop portal, only 3% are for rent, the average value of which in the case of a standard three-bedroom house with a garage in Mendoza is 70,000 pesos per month, while a standard apartment has a value of of 50 thousand pesos. “The properties offered are rented immediately as a result of the high demand and the low supply that Mendoza registers,” explained Puelles Milan.
Profitability for the owners
During 2020 and 2021 there was a historical decrease in the profitability of the rentals which reached 2%, causing hundreds of owners to choose to put their properties up for sale, thus leaving a scarce supply that led to a sustained rise in the value of leases. “The historical profitability of rentals for owners was between 5 and 6% per year of the invested capital (what the house is worth). After the drop in 2020 and 2021, we began to register a rise in profitability whose percentage reaches between 3 and 3.5%,” said Estanislao Puelles Milan, head of the Mendoza Association of Real Estate Brokers.
The specialist assured that although in dollars the profitability is very low and is almost ruled out in Argentina, a recovery is observed that is given by the increase in rents and the sincerity that there was in the value of the properties in dollars that registered a drop .