Rents: an era has ended that caused one of the biggest crises in the real estate market

On October 17, the contracts signed under the original version of the rent law ended; what happened between 2020 and 2023 and between 2024 and 2026 - 10 minutes reading' In October 2023, when Martina signed the rental contract for her two-room apartment in Chacarita, she knew that for the following three years there would be some predictability: the price would be updated once a year and she should only renegotiate the terms in October 2026, as indicated by the rent law. At that time, she started paying $280,000 monthly, and three years later, her last installment reached $1,139,971. In the meantime, she went through two updates: the first, of 209%, and the second, of 31.76%. However, when the contract expiration approached and she had to go out and find somewhere to live again, she found a reality very different from the one she had left behind. Three-year contracts were no longer the rule, annual increases were behind her, and updates every three or four months had become the norm. This is added to a new reality of prices: today, a two-room apartment in the same neighborhood is on average $939,222. But there was also an important difference: while in 2023 finding an apartment to rent had become an almost impossible task due to the scarcity of supply, three years later there were many more properties available on portals. Martina's experience reflects a situation experienced by other tenants whose contracts were signed under law 27.551 and the latest ones were up for renewal. Three years earlier, on October 17, 2023, the reform of the rent law from July 2020 was published in the Official Gazette. That is why last Saturday the minimum term of the latest contracts usually signed under the original version of law 27.551, which established three-year agreements with annual increases based on the Rental Contract Index (ICL), was fulfilled. It was one of the most discussed norms in the Argentine real estate market in recent times, which was born with the intention of providing stability to tenants, but its application coincided with an unstoppable increase in inflation that ended up complicating what it sought to resolve. It was modified in October 2023: the three-year contracts were maintained, but adjustments became semi-annual through the Casa Propia index. This reform lasted just over two months, until DNU 70/2023 at the beginning of Javier Milei's government repealed the law and opened the way to a contractual freedom scheme. Although the rules changed, previous contracts remained in effect until their expiration, which is why the latest agreements with annual increases now arrive at the end of their three years, while those signed under the October 2023 reform, with semi-annual adjustments, will finish that term between October and December 2026. According to the Real Estate College of Buenos Aires, there are fewer than 20,000 active contracts under this latest regime, equivalent to 3.5% of the current ones. Thus, the expiration of contracts under the old law allows for a balance of what happened since its repeal. Has the rental market really improved? The main conflict: annual increases with high inflation For Federico González Rouco, an economist specializing in housing, the change was positive, although far from solving the problem. "I believe it improved a little, it was simplified. By repealing the law and in this mini recovery of mortgage credit, the access to housing capabilities that exist improve, especially regarding entry barriers," he explains. His point points to one of the most important problems of the previous contracts: the initial rental prices. Since landlords knew they could not update the values for 12 months, in a context of inflation that reached over 200% annually, they tended to set high initial prices to compensate for the loss of income that would occur during the contract. And that value not only determined how much the tenant paid during the first month, but it also affected the deposit, guarantees, suretys, and other expenses necessary to move. That is, the higher the initial rent, the more money a family needed to gather to access housing. That is why, for the economist, the repeal allowed the rental price to be distributed throughout the entire contract, instead of concentrating a significant part of the cost at the beginning. "For me, the three years never seemed that serious. Yes, I believe it amplified a problem that came from this freezing objective," he affirms. That dynamic also had another consequence, since in the months before the update, the rent lost value against inflation, but when it was time for the adjustment, it could double from one month to the next. "A household that had managed to balance its personal finances in a context where there was nothing left over, one month to the next you doubled the rent and broke any predictability scheme," he maintains. However, he also rescues some positive aspects of the original regulation, such as the recognition of different guarantee alternatives beyond the owner and the incorporation of a social rental chapter that was never implemented. After the repeal, the supply was recovered According to Zonaprop, after the repeal, in January 2024, the supply increased by 62% compared to the previous month and reached 195.4% in the year. The recovery continued in the following years, although at a slower pace: in September 2026 -the last month reviewed-, the volume of properties advertised was 3.6 times more than the minimum in February 2023. For Soledad Balayan, owner of Maure Inmobiliaria, the main problem of the old law was precisely the supply: "The rent law aggravated access to housing by generating an unnecessary scarcity effect. No measure aimed at reducing the supply can be beneficial for those looking for rent," she states. The broker points out that both the mandatory extension of contracts and the restrictions on setting adjustments, terms, and currencies ended up discouraging landlords. "The repeal gave oxygen to the market, cleared the fears of the owners, and incentivized a return to the rental market," she assures. In the same vein, Enrique Abatti, a lawyer specializing in Real Estate Law and president of the Chamber of Property Owners of the Argentine Republic (CAPRA), considers that the law generated a negative period for the rental market and that the impossibility of updating values for 12 months in a context of high inflation ended up discouraging traditional renting and incentivizing some owners to put their units on the temporary or sale market. However, the fact that there are more apartments available today does not necessarily mean it is easier to pay the rent. That is the main point of discussion between those who highlight the market recovery and those who warn about the economic conditions of households. More apartments available, but better conditions to rent? Fernando Bercovich, a member of the Civil Association for Equality and Justice (ACIJ), proposes analyzing the situation from two perspectives: the functioning of the market and the living conditions of those who rent. "The supply did increase compared to 2023, which was very low, and this was due to the inflation of that time, which with annual updates and three-digit inflation it was difficult to apply that law which did not favor the owner and began to disadvantage the tenant," he recognizes. However, he maintains that some housing had not completely disappeared from the market, but was rented through informal or private agreements that did not appear on portals. After the repeal, these properties were re-listed because the contractual conditions were more favorable for their owners. The difference, according to Bercovich, is that current listing prices do not tell the whole story. Before, the initial values were higher because owners anticipated the loss of income that inflation would produce during the year. Now "they are listing prices that are updated and change every three months," warns Bercovich. The discussion, then, ceases to be just about how many apartments are available and shifts to focusing on how much those who need to rent them can pay. The problem that remains unresolved: income According to the report by Metadato, prepared by the Chamber of Urban Developers (CEDU) and the Association of Housing Entrepreneurs (AEV), during the first eight months of 2026, salaries increased by 20.54%, practically in line with the inflation of the period which sums up to 21.35%. However, they still have an accumulated delay of 29.96% behind longer-term inflation. This situation is also reflected in the latest Tenant Survey carried out by ACIJ, along with the Center for Legal and Social Studies (CELS) and CONICET, among 1245 people. According to the results, 52% of respondents allocate more than half of their income to rent. Furthermore, 58.8% declared having borrowed money and, among them, 72% used that financing to pay for the housing. "Salaries in general do not update every three months with CPI but rents do. What we see is that more and more tenants dedicate more than half of their household income to paying the rent," warns Bercovich. The open debate: is new regulation needed? "We are talking about housing, not a luxury consumption. It is fine that there is a business, but it is a right," he maintains. From ACIJ, they argue that a regulation with three-year contracts and semi-annual updates, similar to the latest reform of 2023, could offer greater protection without necessarily causing a massive exodus of properties in the current context of lower inflation. From the real estate sector, on the other hand, they warn that contractual flexibility was precisely what allowed the supply to recover. Balayan considers that "many contracts made under the law remained with high prices after the repeal and those tenants saw it attractive to terminate early to go to the market to rent something better and at a more attractive price." Even some conditions that had been questioned during the law's validity could return through agreements between the parties. Enrique Abatti (h), a lawyer specializing in Real Estate Law and director of CAPRA, points out that the slowdown in inflation is already driving the emergence of contracts with semi-annual adjustments, instead of quarterly or fortnightly ones. If this trend continues, he considers it possible that annual increases will be agreed upon again in the future. Thus, six years after the entry into force of the original law and three after its reform and immediate repeal, the contracts of that law reach their expiration in a market that is no longer the same: there are more apartments available, initial prices no longer register the jumps of then, and negotiation rules have changed between the parties. However, the underlying problem remains. Because one thing is that there are homes to rent and another, very different, is whether the income is sufficient to pay for them.