Argentina's rental market sees surge in supply, but payment defaults rise

Argentina's rental market has undergone a dramatic transformation in the past two years, shifting from a severe shortage of available properties to a more competitive landscape for landlords. Following the repeal of the previous rental law, the market has reconfigured, with the stock of properties available for rent now 3.2 times higher than in February 2023, which marked the lowest point in available listings.

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The solution of the guarantee was a great catalyst for this entire process. It managed to include many people who had difficulties accessing housing or developing a business.

During a real estate summit, Diego Giani, commercial director at Finaer, discussed how the deregulation of rental contracts spurred a rise in the use of rental guarantees. He noted that these guarantees have been instrumental in helping many individuals access housing or establish businesses. The increased supply has led to a more stabilized market, offering more choices for tenants and putting downward pressure on rental prices in both the capital and surrounding areas.

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Today the market is much more stabilized. There are many more options for tenants and prices tend to stabilize, both in the Capital and in a large part of the Gran Buenos Aires.

While the greater availability benefits tenants, Giani highlighted that rental guarantees have also become crucial for protecting landlords' income, especially for those who rely on rental payments as their primary source of income. However, the recent economic climate, marked by inflation and increased interest rates, has impacted tenants' ability to pay. Giani acknowledged a rise in payment defaults after the elections and subsequent rate hikes. Despite this challenge, he expressed cautious optimism, noting that the rate of defaults appears to be stabilizing, which he considers positive news.

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The peace of mind that a guarantee provides is very important because it ensures that the owner collects their income. There are many people who live off that rent, which is their life's savings and they cannot afford to stop collecting for a month.