22% of Buenos Aires locals rescinded their rent in June

In June, 15% of the tenants of the City of Buenos Aires could not pay the rent, almost double the number registered a month ago. While 22% of the commercial premises terminated their contracts. For real estate agencies the tightening of the quarantine and the new rental law, which begins to take effect this Wednesday will further exacerbate the scenario to future.

The City Association of Real Estate Brokers assured that in June 85% of the tenants paid the rent, when in May that percentage was 92%.

The entity’s vice president, Marta Liotto, assured that “there is a 15% non-compliance despite the fact that the payment channels work well, what does not work well is quarantine.”

Commercial Rentals

The situation is more worrisome for commercial premises rentals because the abrupt drop in activity during the more than 100 days of quarantine adds that 22% of the premises terminated their contracts in June.

“Of that 78% who continue with their rental contract only 40% managed to pay the rent last month, that is to say that more than 30% of the tenants of premises failed to pay, “Liotto explained according to ambito.com.

Cessation of activities

Meanwhile, the Argentine Chamber of Commerce (CAC) indicated that 11.5% of the commercial premises that ceased their activities throughout the country due to the pandemic will not reopen once the emergency is over.

“The most critical situation is experienced in rentals in shopping malls and open-air shops where businesses could not open in any of the phases decreed by the Government“Liotto said.

Still, most of the traders consulted by the CAC estimated that sales not only did not recover in June, but fell compared to May. 34.8% expected a month-on-month drop of more than 50%. The rest expected lesser reductions, and 15% did not expect month-to-month changes.

The new rental law will complicate the situation of tenants, according to real estate brokers

Only 18.2% expected to have better sales in June than in May, at some level, so the situation may worsen in the coming months.

For Federico Castromil, vice president of the Argentine Real Estate Chamber (CIA), the next 17 days will be the opportunity to “take advantage to adapt to the new regulations and draft the contracts as they will be in the future.”

With the new rental law, the contracts signed from July will have an average increase of 20% and the increases must be annualized.

“We are hoping that the prices of rental properties will increase and of course the supply will go down, many homeowners will want to take their property out of supply until the market accommodates,” Liotto said.

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