Photo via Clarin

Thinking of buying an apartment in Buenos Aires? Of course not; they are insanely expensive. But just so you know, this distant possibility became even less realistic over the past year.

According to a report released by UADE yesterday, the price per square meter in new and used apartments in August went up by as much as 12 percent in some parts of the city, compared to the same month last year. However, it’s not all bad news: the Upper House  today passed a bill protecting tenants in rent contracts, but we’ll get to that later.

The Report

UADE’s report found that the average price of real-estate in the City of Buenos Aires in August was US $2,697 dollars per square meter for new apartments and US $2,241 for used ones. This represents an increase of 6.8 and 4.8 percent compared to last year, respectively — though prices vary on neighborhood. Palermo, Recoleta, Belgrano and Núñez were unsurprisingly the priciest; Recoleta topping the list with a whopping US $3,309 per square meter. Núñez followed with US $3,011.

Recoleta was also the neighborhood that saw the steepest increase in its prices compared to last year with 12.5 percent. The value per square meter in Núñez, by contrast, only rose by 1.8 percent, with all other neighborhoods placing in between.

If this report made you realize how little you could actually afford, news coming out of Congress might take the edge off. The Upper House today unanimously approved the so-called “Rent Law,” presented by tenant organizations from all over the country tired of real-estate agency and owners taking advantage of them.

These are the most important aspects of this initiative that modify the country’s civil and commercial code:

  • It establishes that rent increases be annual and no higher than inflation. “Tenants face indiscriminate increases in rent. Semester adjustments surpass all inflation indexes and have no parameter whatsoever,” said leader of one of the organisations, Gervasio Muñoz.
  • Minimum contracts will last three years instead of two. This is key for tenants because the steepest increases usually come at the time of renegotiating contracts.
  • It establishes that commissions for real-estate companies be determined by every jurisdiction and, should they not be regulated, will never be more than a month’s rent. The clause comes on the heels of a ruling by a court in the City of Buenos Aires in September, which nullified a resolution from the College of Real Estate Brokers of the City of Buenos Aires (CUCIBA) – the government agency that regulates real estate in the capital that allowed agencies to charge up to two months’ commission on rental contracts.
  • Eliminates the six month period for tenants to break the contract without a justified cause.
  • Orders extraordinary expenses — i.e building renovations, for example — in no case be charged to the tenant.
  • Parties will be legally bound to agree to renew the contract at least sixty days before the contract expires.

“The norm aspires to substantially improve the quality of life of 6.5 million tenants” and would represent “a radical change in rent culture in Argentina,” said Muñoz.