Renting in Buenos Aires has become a daunting task for thousands of people, while international tourists can easily enjoy a bargain price due to oversupply. The current triple-digit annual inflation that exploded the property market roots has led to temporary and dollar offers dominating the rental market. Martina Campos López (33 years old) and her partner (43) have been searching for an apartment for more than a year, despite having good jobs and the support of guarantors.
Previously, they spent less than 50% of their income on rent, but now they cannot even afford to pay 70%. The situation has become even more dramatic in the last six months with almost zero supply as the inflation rate has accelerated. However, some international tourists, such as Jamie Larson, a 29-year-old New Zealander, can easily find a modern furnished apartment for a bargain price.
According to Alejandro Bennazar, President of the Argentine Real Estate Chamber, the rental market has been completely distorted by high inflation and the new rental law in force since June 2020. The law sets an index for rent adjustment that combines equally the evolution of wages and inflation, which according to Bennazar, is a ticking time bomb. The current law allows a single annual adjustment of the rental value and contracts for at least three years, which landlords find difficult to accept when inflation is projected to exceed 120% in 2023 and the exchange rate gap between the official and parallel markets is close to 100%.
Currently, the city of Buenos Aires is experiencing the worst housing crisis in the last 30 years, with an estimated 130,000 empty homes in the city. The fiscal data shows only 70,000 rented homes in the city, but the level of underreporting is much higher, with an estimated 500,000 homes that rent.
Faced with this crisis, the mayor’s office launched zero-rate loans to finance the moving costs of those who manage to rent and to renovate empty houses that are later offered for rent. The solution to this crisis is to stabilize the economy, stimulate supply, and provide relief so that the cost of entry is not so high, suggests Christian Werle, the president of the Housing Institute of the City of Buenos Aires.
