The drama that families and all tenants in the City are going through has already become an issue on the public agenda, which nevertheless is – it seems to be – far from finding a solution. Testimonials from tenants, landlords, the real estate market, statistics and reports; Everything shows that today the market is going through one of the biggest crises in its history. On the one hand with values that have skyrocketed, with a low supply and very high demand, also intervened by the irruption of temporary rentals; But above all because inflation pulverizes any possible forecast and, at the same time, the possibility of having an income in dollars generates more and more interest among the owners
Two recently published reports show how the number of properties offered for rent was reduced. On the one hand, Mercado Libre (together with the University of San Andrés), which detected a 30% drop in the supply of 1 and 2 room apartments in the last year. The research further identified that 50% of publications are offered with dollar prices. In the AMBA: 94% of the offer is for sale and only 6% for rent.
On the other hand, the CEM (Center for Metropolitan Studies) has just published another study on the "Accelerated growth of Airbnb in the context of housing crisis". There they evaluate how the competition between the supply of temporary rentals and that of permanent rentals deepened: "More than 15,000 properties in the City of Buenos Aires, which could supply the supply of permanent rentals, have been displaced to the temporary rental market. In 2019 this same estimate was at 9,338 units, so that only in four years – and with a pandemic in between – it grew 62%".
All this scenario caused, as Clarín published last month according to a survey carried out by several entities, that 6 out of 10 tenants borrow to be able to pay. In addition, the percentage of families that use more than half of their income to keep up is growing.
The increase in prices, on the other hand, has been outpacing year-on-year inflation. The study of Mercado Libre and the University of San Andrés recorded the following values: "In the City, the average for 1 environment is 90 thousand pesos, with an increase of 138% year-on-year; 2 environments 120 thousand pesos, with an increase of 144% year-on-year; and 3 environments 210 thousand pesos, with an increase of 144%". This in reference March 2022 - March 2023.
Between the demand and supply in dollars of the properties, facing a rent becomes increasingly complicated for tenant families. Because although it is true that the rate of inflation liquefies that rent in a couple of months, the start of the contract is a barrier that more and more families find it difficult to overcome.
In AMBA, the study by ML and the University of San Andrés assessed that more than 50% average of rents are in dollars: "In 2022 they represented 32% and in 2020, 20% of publications."
The data do nothing more than endorse again and again a problem for which there is no short-term solution. The CEM revealed that in Palermo there is 1 Airbnb offer for every 21 homes, while in 2019 there was 1 in 31.
For this reason, the study focused on "corporate hosts", that is, professionals (in general in the field of real estate) who offer specific services for this type of demand. "In Buenos Aires, 45% of the homes surveyed are in the hands of multi-hosts, digital identities that manage more than three offers. There are hosts who have up to 100 offers," they detailed.
Regarding the dollarization of contracts, it is worth clarifying: the modality grows despite the fact that the legal framework establishes that contracts for housing leases must be in local currency and that they must be adjusted by the corresponding index (ICL Index of Lease Contracts, conformed by the CPI, Consumer Price Index, and the RIPTE, Average Taxable Remuneration of Stable Workers); on an annual basis.
All this happens while the law that came into force in July 2020 is in force. In two months, the first contracts concluded under this regulation will begin to expire. This year, versions regarding its repeal or modification caused signatures to be stopped to agreements already made. Also, that contracts be concluded, such as extensions with semi-annual updates, outside the law.
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