In August, tenants in Argentina will face an annual adjustment of rents. rentals which will mark a historic record. This increase, which will apply to contracts signed under the old Rental Law, will reach 247.56%, exceeding the adjustment of 244.4% recorded in July.
This significant increase reflects the country’s current economic situation, characterized by high inflation and a constantly changing real estate market. The Law on Rentalswhich was repealed at the end of 2023 by a Decree of Necessity and Urgency (DNU) of President Javier Milei, established annual rent updates based on the Lease Contract Index (ICL).
This index, calculated by the Central Bank, combines the variation in inflation measured by the Consumer Price Index (CPI) of INDEC and wages according to Ripte (average remuneration of stable workers).
Although the law was repealed, contracts signed under its validity must still comply with these updates. The record adjustment in August is due to the combination of persistent inflation and rising wages, factors that have led to a significant increase in the ICL.
For example, a rent A $100,000 apartment in August 2023 will now cost $347,094, while a $200,000 apartment will rise to $694,188. This adjustment represents a considerable challenge for tenants, many of whom are already facing economic hardship due to inflation and currency devaluation.
The situation is particularly complicated for those tenants whose contracts were signed before the repeal of the Rental Law. These contracts, which have a duration of three years, must be adjusted annually according to the ICL, which has led to increases that now exceed market values.
Record
In previous years, annual updates kept rents below market value, but the current situation has changed dramatically. In addition to contracts adjusted by the ICL, those governed by the Casa Propia index will also face significant increases.
In August, this index will register an increase of 63.34%, exceeding the adjustment of 59.89% in July. For example, a rent A two-room apartment in the City of Buenos Aires, which cost $416,991 in February 2024, will cost $681,123 starting in August.
