2024-11-07 11:44:00
Many rental contracts in Neuquen and Rio Negro are concluded according to the latest rental laws and are updated every 6 months according to the Casa Proopia Index. In December 2024, the second round of updates is coming, and the growth percentage is known.
Law No. 27,737 is the last law governing private rental contracts in Argentina. The bill was enacted in mid-October 2023 and suspended in December of the same year.With the entry into force of Decree on Necessity and Urgency (DNU) 70/2023.
The law stipulates that lease contracts should be renewed every six months and a so-called homeownership factor should be applied. It considers the lowest metric between the change in average wages over the previous year and the average rate of inflation over the same period..
Law No. 27,737 sets the minimum lease term at 3 years and requires contracts to be concluded in national currency.. Likewise, it provides tax benefits to property owners who rent out their properties.
Its sanctions were motivated by severe supply shortages in the rental market, unsolvable problem. DNU 70/23, on the other hand, managed to increase the supply of rental housing in exchange for a significant deregulation of the market.. The signed contract is now governed by the provisions of the National Civil and Commercial Code and publishes rent, renewal and currency.
Rent: Increase based on owner-occupied housing factor in December 2024
The price of a lease contract signed in December 2023 will increase by 66.97% in December next year. This percentage is calculated by accumulating the delta in the homeownership coefficient over the six months since the last update (June 2024).
According to the Casa Proopia Index, rental contracts grew by 66.97% in the first half of December 2024.
To find out how much you’ll have to pay from December 2024, you have to multiply the rental price paid before this month by 1.6697. For example, if the rent through November 2024 is $250,000, the amount payable in the 6 months starting in December will be $417,425 ($250,000 x 1.6697).
On an annual basis, this increase is lower than the rental increase governed by the Index of Lease Contracts (ICL).. This is not a minor problem because the home ownership coefficient used in the calculation already takes into account the months with the highest economic nominal value when considering annual moving averages.
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**Interview with Expert on Rental Market Changes in Neuquén and Río Negro**
**Interviewer:** Thank you for joining us today. To start, can you give us an overview of the recent changes to rental laws in Neuquén and Río Negro?
**Expert:** Absolutely! The rental market in Argentina, particularly in these provinces, has undergone significant changes recently. Law No. 27,737 was enacted to regulate private rental contracts more effectively due to severe supply shortages. It required leases to be renewed every six months, applying a homeownership factor based on the lower of average wage changes or inflation.
**Interviewer:** Interesting! And how does the upcoming December 2024 update fit into this system?
**Expert:** The second round of updates will reflect the changes in the Casa Proopia Index. Many contracts will see increases based on the new metrics outlined by the law, and we are eagerly awaiting the announced growth percentage. This is crucial for both landlords and tenants as it will impact affordability and rental supply.
**Interviewer:** What were some of the motivations behind these legislative changes?
**Expert:** The main goal was to address the severe shortages in the rental market. The previous regulations under Law No. 27,737 were meant to stabilize rents and make housing more accessible, but they ultimately led to declines in rental availability. The Decree on Necessity and Urgency (DNU) 70/2023 that followed aimed to deregulate the market, incentivizing property owners to rent out their spaces while making it easier for them to operate.
**Interviewer:** How have tenants responded to these new changes?
**Expert:** Tenants are understandably concerned about rising rental costs due to the adjustments in the law. The anticipated increases can be challenging for many families, especially in light of prevailing economic conditions. However, there is hope that deregulation will improve the supply of rental units over time.
**Interviewer:** Lastly, what can we expect moving forward regarding the rental market in these regions?
**Expert:** We are looking forward to seeing the outcomes of the upcoming index adjustments. If implemented effectively, the new laws should stabilize the market while hopefully increasing the supply of rental properties. It’s very much a balancing act between ensuring affordability for tenants and giving landlords enough incentive to offer their properties. The next few months will be critical in shaping the rental landscape.
**Interviewer:** Thank you for sharing your insights! It’s a complex situation, and we appreciate your expertise on this topic.
**Expert:** Thank you for having me! I’m glad to provide clarity on these important changes.
