Rents in AMBA: stability of house prices and 5% increase in apartment prices
A private report confirmed that in August, the most recent month for which full information is available, the Buenos Aires Metropolitan Area (AMBA) saw minimal changes in house rental prices and a 5% month-on-month increase in apartments.
After DNU, which repealed the tenancy law, housing supply increased by 200% when the city of Buenos Aires was included in the Greater Buenos Aires (GBA) corridors. This expansion has contributed to the fact that rent prices have not increased as much as they did until April, when the average increase was 10% per month. Currently, the increases are in line with inflation, which has started to slow down and hovered around 4 percent for four months.
According to this study, conducted by Mercado Libre Inmuebles together with the University of San Andrés (UDESA), rental prices in pesos for apartments and houses in AMBA increased by 5.3% and 0.6% month-on-month, respectively (see graphic).
When broken down by region, house rental prices per square meter saw downward changes of -2.9% in GBA North, -0.1% in GBA South and -0.3% in GBA West.
In contrast, apartments in these areas showed more significant increases with month-on-month fluctuations in price per square meter of 4.5% in CABA, 6.6% in GBA North, 5.6% in GBA South and 6.7% in GBA West .
There are estimated to be more than 17,000 properties as part of the supply spread across AMBA’s neighborhoods and districts
According to the study, monthly rent for a two-bedroom apartment in AMBA is around $480,000, with the cheapest areas being GBA West and South, where average prices are $380,000 per month. On the other hand, rent for a three-bedroom apartment averages $550,000 and can be as much as 25% lower in the same areas.
Among the GBA parties, in San Miguel, since the introduction of the DNU, owners have shown a renewed interest in renting out their properties, benefiting from the repeal of the law that did not favor them, reported by the real estate market.
Ariel Córdobafrom Córdoba Properties, highlighted Infobae that “this resulted in an increase in supply of around 150% in the first months, which is a significant expansion given the previous shortages. Although the percentage of initial supply has fallen at this point, demand remains strong; in fact, all available units are booked almost immediately.’
Leases are usually for two years with quarterly updates based on indexes such as the Index of Leasing Contracts (ICL) or the Consumer Price Index (CPI).
In this area, for example, a two-room apartment of 45 square meters with a garage costs about $380,000, plus $65,000 in expenses. A three-bedroom apartment in the same tower costs $430,000 plus $85,000 in expenses.
“Prices increase if the building offers civic amenities. On the other hand, a three-bedroom duplex with a garage, patio and barbecue rents for $485,000, and a four-bedroom house with similar features for $680,000 a month. Recently, rental operations with advance payments have been registered in gated communities in Bella Vista, benefiting both owners and tenants,” noted Córdoba.
In AMBA, price movements in the real estate market showed signs of stabilization and growth in some sectors, according to Mercado Libre and UDESA. In CABA, a month-on-month increase in the selling price per m2 of apartments was observed by 1.5%, consolidating the upward trend that indicates a market recovery. And in departments, a year-on-year increase of 3.9% (see chart).
Conversely, GBA North saw a slight decrease of 0.3%, indicating a slowdown in property appreciation in the area. As for GBA South and West, the differences were almost insignificant, at 0.1% and 0.3% respectively, indicating stability in these markets.
According to a study in the north of GBA, Vicente López and San Isidro lead the market value of apartments with prices of USD 2,660 and USD 2,500 per m2. In the western GBA, Ituzaingó and La Matanza lead the valuations with USD 1,735 and USD 1,500 per m2, while in the southern part of the GBA, Lomas de Zamora and Quilmes represent the highest values with USD 1,939 and USD 1,711 per m2.
From the real estate sector, they emphasize that the improvement of activity is essential. In CABA almost 5,000 notarizations in Julywhich represents a year-on-year increase of 50 percent. In the province of Buenos Aires, 9,449 deeds were recorded in the same month, an increase of 16.40% compared to 8,117 deeds in July 2023. Both notarial colleges in the most important districts of the country confirmed these figures.
In an analysis of the increase in real estate transactions Santiago Magninfrom Deinmobiliarios and a real estate expert, pointed out that the significant increase in the number of purchases and sales is not justified by the improvement in the conditions of mortgage loans, since there are still few of them. “Despite the opening of portfolios in banks, specific mortgage loan operations are minimal. In this context, the increases observed in real estate activity appear to be more related to a change in buyer expectations.
In 2024, according to Magnin reports, an 8% year-on-year increase in closing prices is observed in CABA, both in August and July.
“The reason for these increases is attributed to savers who, disillusioned with other investment alternatives and motivated by changing expectations, decided to mobilize their dollars into the real estate market. This is reflected in the active sale of properties at significantly higher prices, especially in premium areas such as Recoleta and Núñez,” concluded Magnin.