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It takes 35 years of rent to recover the investment in a Buenos Aires property

2021-05-06T07:09:29.531Z

The number improved against 2020 due to the rise in rent values ​​and the fall in property prices. Natalia Muscatelli 05/05/2021 8:59 AM Clarín.com Economy Updated 05/05/2021 8:59 AM The profitability that can be obtained by an investor who rents his property is at historically low levels. However, the rent increases in the last year, added to a drop in property prices , converged in a relative improvement in rent in the City of Buenos Aires (CABA). According to a study carried out by the p



Natalia Muscatelli

05/05/2021 8:59 AM

  • Clarín.com

  • Economy

Updated 05/05/2021 8:59 AM

The profitability that can be obtained by an investor who rents his property is at historically low levels.

However, the

rent increases

in the last year, added to a

drop in

property

prices

, converged in a relative improvement in rent in the City of Buenos Aires (CABA).

According to a study carried out by the property portal Zonaprop,

today 35 years of rent are needed to amortize the investment, 15% below

what was required in April of last year.

Thus, the rent, as a result of

the rental / price

of the property, stands

at 2.85%

per year, according to these records.

This scenario is due to the fact that, so far in 2021

, rental prices

accumulate an increase of 17.9%, just above inflation, and

in the last twelve months that figure rises to 69.5%

.

What are the neighborhoods with the highest profitability in CABA?

Lugano (3.6% per year), Paternal (3.4% per year) and La Boca (3.4%) are the best neighborhoods for investors seeking income.

While those with the lowest return on investment are Retiro (2.6%), Puerto Madero (2.6%) and Liniers (2.6%).

In the middle area of ​​the profitability ranking are Mataderos (3.2%), Santa Rita (3%), Villa Pueyrredón (2.9%), Coghlan (2.9%) and San Telmo (2.8%) .

If an analysis of the return on investment is carried out by region, the

southeast area is positioned as the most profitable (3.1%

) and the northern corridor as the one with the lowest recovery percentage (2.7%).

However, all the regions of the Federal Capital show both a monthly and annual increase in profitability.

What has been happening with

rental prices in the Buenos Aires area is that they continue to increase

as a result of the shortage of properties available to be rented from the sanction of the new Law that has been in force since July 2020. 

The price of properties has fallen 1.4% in dollars so far this year.

Photo Lucia Merle

Currently, an average apartment with

two rooms and 50 m2 costs $ 36,171

pesos on average, according to this platform.

While a unit of

three rooms and 70 m2 is rented for $ 50,211.

According to the ranking of prices in the City, Puerto Madero is the most expensive ($ 73,814 per month), followed by Nuñez ($ 43,402 per month) and Palermo ($ 43,164).

In the middle price zone are Chacarita ($ 37,493; Villa Ortúzar ($ 35,571); Monte Castro ($ 34,788); Parque Patricios ($ 33,393) and Floresta ($ 31,932). The neighborhoods that represent the cheapest rents are La Boca, Liniers and, finally, Lugano, with $ 19,967.

According to the ZonaProp survey,

“all neighborhoods register an increase in the year-on-year value of more than 50%.

Floresta is the neighborhood with the highest year-on-year price increase (90.5%), followed by Villa del Parque (90.3%) and Villa Luro (86.2%).

The neighborhoods that had the lowest annual price increase were San Telmo (55.5%), San Nicolás (51.4%) and Lugano (43.8%).

Selling prices down

Parallel to what happened with rents, the prices of properties for sale accumulate falls.

According to the platform, that drop is 1.4% in dollars, so far this year and

10.5% from the maximum of the series, in 2019.

The average price of a unit in the City of Buenos Aires is US $ 2,508 per m2 and shows a decrease of 0.6% compared to the previous month.

Thus, a 50 m2 two-room apartment costs US $ 130,654, while a 70 m2 three-room apartment costs US $ 185,687.

Despite the increase in rent, according to the Real Estate Report, it continues to be within the historically lowest levels for residential rentals and

is only 40% of that obtained in 2017, when it reached 5.4% per year.

Its analysts make these calculations: “To reach the performance of 2017, the rental value

should increase practically one and a half times

above the current one (+ 145%), keeping the sale value constant or the latter reducing by 58.6 %, the rental value remaining unchanged ”, they assure.

NE

Look also

Rentals: real estate companies ask for "urgent" measures to stimulate supply

Rentals: which are the neighborhoods that increased the most in the City

Source: clarin

All business articles on 2021-05-06

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