Argentines shut out of rental market amid landlords’ preference for dollars
By Veronica Dalto
Buenos Aires, Apr 6 (EFE).- “For Rent” signs in the windows of apartment buildings in Argentina’s main cities are becoming an increasingly rare sight.
And prospective tenants who phone real-estate agencies are told that properties have already been rented or find themselves placed at the back of a long waiting list.
Under current conditions, Argentine families and individuals are finding it nearly impossible to rent an apartment, a small house or a horizontal property in pesos in Buenos Aires, La Plata, Cordoba, Rosario, Bahia Blanca, Mendoza or Salta.
Owners of real estate instead prefer to opt for the short-term rental market, either listing their property on platforms like Booking.com or Airbnb or with local real-estate agencies or portals with a view to receiving payment in dollars.
And they are going that route because the profits are double what they would receive in pesos, the president of the Chamber of Real Estate Services Companies (Camesi), Mariano Garcia Malbran, told Efe.
In a phenomenon reminiscent of what occurred in European cities like Barcelona or Berlin, 20,000 apartments are currently available for rent on a short-term basis in Buenos Aires, compared to only 1,500 available for traditional longer-term rentals, the attorney said.
Experts attribute the lack of available properties to a rental law passed in 2020 that caused supply to shrink because the minimum traditional rental contract was extended from two years to three years.
At the same time, tourism numbers rose due to the arrival of foreign students pursuing Master’s degrees or specializations at Argentine universities who were prepared to pay short-term rents in dollars on a per-day, per-week or up-to-three-month basis.
Short-term rentals generally range in price from $700-$800 per month for a one-bedroom apartment, depending on the size, location and amenities, while a traditional rental contract is around a third of that price.
Payment methods vary. Some landlords accept transfers from different foreign countries, while others demand cash in hand or five or six months rent paid in advance.
Dollars and other hard currency are coveted in a country where there are strict restrictions on access to foreign bank notes at the official exchange rate and the inflation rate came in at a three-decade high of 95 percent in 2022.
And landlords also prefer the greenback because profit margins on short-term rentals are typically between 10 percent and 12 percent, compared to between 4 percent and 6 percent on traditional, long-term rentals in pesos, Garcia Malbran said, adding that temporary arrangements also give the property owner more flexibility.
The supply of rental properties is dropping even as demand continues to rise in Argentina, where most homes are priced in dollars and potential buyers must take out mortgages in pesos.
“It’s very sad (for) families or individuals who have to rent a property to live and are unable to do so,” Garcia Malbran said, blaming the situation on “government policies that have not taken into account the need to create access to housing.”
Now, with the 2020 rental law inadvertently exacerbating the housing crisis, President Alberto Fernandez’s administration is looking at ways to suspend or modify it.
That law has placed onerous burdens on property owners, who must accept traditional rental contracts of at least three years, are only allowed to raise rents once a year based on a government-imposed index and must register real-estate lease agreements with the Argentine tax authority.
“We think short-term rentals are going to expand greatly in all the cities” because there are investors buying properties with a view to renting them out on a temporary basis, Garcia Malbran added.
The trend toward accommodations that cater specifically to short-term tenants is being led by Buenos Aires, where buildings can already be found that feature fully furnished and equipped rooms, a reception space, common areas, and free WiFi throughout the premises. EFE