Rising inflation, combined with a new housing reform and the decrease in the value of the peso, is driving up rent prices in the Argentinian capital Buenos Aires. Considering a report from Bloomberg, rent prices have now risen 67% from a year ago.
“This is the biggest increase on record,” reported the newswire, quoting a local real estate firm as saying.
The sudden rise is also blamed on the country’s latest housing reform, which allowed property owners to stretch rental contracts to three years but denied them the right to raise prices whenever they want.
Under the law, the central bank will publish an index, indicating how much rent the property owners can increase.
“Since landlords in Buenos Aires don’t know how much they’ll be allowed to raise prices later on, they’re jacking up rents on new contracts now before the index takes effect,” the report added citing local realtors.
Some lawmakers are demanding that the law should be dismantled or amended, but analysts say it is less likely to be changed anytime soon.
While the real aim of the law was to curb prices, it is having a reverse effect.
Meanwhile, many wealthy Argentinians have left crowded Buenos Aires for the fear of contracting coronavirus, moving into plush, gated communities outside the capital city.