Rents rose above inflation in 2022: which is the Buenos Aires neighborhood with the most demand

Rents rose again above Inflation in 2022. According to a report prepared in December by Mercado Libre and the University of San Andrés, apartments for rent (at constant prices) rose 1.4% year-on-year more than the official INDEC index.

The rise, in any case, was less than that of 2021, when there were more distortions in the market due to the entry into force of the Rental Law: last year, the year-on-year increase in constant prices had been 6.5%.

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The report also provides details on the Buenos Aires neighborhoods where rental prices increased the most in the last 12 months. As expected, they are those with the greatest demand: the neighborhood of the City of Buenos Aires where the highest year-on-year increase in the rental price in constant pesos per square meter of apartments was observed was Palermo, with an increase above Inflation of the 48.6%. According to data from Zonaprop, 40% of the rental supply there is in dollars.

In the AMBA, meanwhile, the largest increase was registered in La Plata, where apartment prices rose 31% above Inflation due to a combination of high demand and low supply.

As explained by Daniel Bryn, founder of Invest Real Estate, the reasons for the phenomenon are explained because “there are 6,300 apartments for rent and more than 100,000 for sale; that is to say, that we only have 5% in rent”.

Speaking to El Cronista, Bryn said that "as long as there is still very little supply, prices will continue to rise."

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“The owner sees that they follow the same conditions of the Rental Law. The values ​​are updated only once a year. With inflation, you are losing profitability. This means that, when the owners have to put a property up for rent, they do it with very high numbers because they know that they will lose during that year in the face of inflation”, Bryn remarked.

The Rental Law, approved with much controversy in 2020, contemplates three-year contracts and annual updates with an index provided by the Central Bank taking into account Inflation and parity increases.

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“We are closing a very difficult year for those who have to access a new rental. It is the logical consequence of the increased risk that the new law imposed on the owner and, above all, the obligation to keep the price frozen for a year while Inflation grows close to 100% in the same period," he added, for his part, José Rozados, director of Real Estate Report.

That is why in recent months many "word" contracts have emerged outside the law. "In certain areas, the apartments that are rented are practically disputed by multiple potential tenants, who, in some cases, are willing to pay more than what is requested, in order to obtain the contract for the unit," said Rozados.

It is the logical consequence of the increased risk that the new law imposed on the owner and, above all, the obligation to keep the price frozen for a year while inflation grows close to 100% in the same period," he added, for his part, José Rozados, director of Real Estate Report.