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Buenos Aires rents rising faster than inflation

Buenos Aires rents rising faster than inflation

Nuñez, Recoleta see increases of almost 50% over past 12 months

Rent prices in Buenos Aires City grew faster than any measure of inflation and wages last year, according to a new study commissioned by the City government.

The report examined rent prices by neighbourhood in the City between August 2014 and August 2015, and highlighted sharp increases across Buenos Aires City over the year, including in more expensive areas such as Palermo and Recoleta where rent prices are disproportionately higher than the City average.

“In the period August 2014 to August 2015, the price of rent for apartments used by two or three inhabitants grew by an average of 34.5 percent,” the report said. For the City as a whole, average rent for two to three bedroom accommodation stood at 5,581 pesos per person per month in August 2015.

The largest jumps seemed to be have taken place in the more well-to-do areas of Buenos Aires.

In Núñez — an affluent neighbourhood at the northern edge of the City home to local football giants River Plate — the highest rise in price was recorded, with annual average growth in rent for two or three-person apartments of 45.7 percent.

Other neighbourhoods showed similarly large increases over the year, such as Retiro, where average rent prices were up 44.9 percent over the 12-month study period.

“Retiro, Balvanera, Flores and Almagro also registered significant growth in rents,” the report said.

Elsewhere, the priciest neighbourhoods in Buenos Aires City also showed sharp increases in rent. Currently the most expensive neighbourhood in the City for accommodation is Palermo, which saw prices rise by 34.4 percent on average over the last year.

The cheapest areas surveyed by the City was Flores, with an average rent of 4,600 pesos a month and an increase of 37 percent in the last year. And the most modest increases were seen in San Nicolás, where rents increased by 19.6 percent in the last 12 months. The City did not publish details on the cost of rent in the most impoverished areas of the City.

The rapid increase in rent prices was accompanied by further unwelcome news for many of those living and working in the City. The study also highlighted that the percentage increase in rents across the year significantly exceeded that of local wages, according to the Office of National Statistics (INDEC), also included in the report.

The significant growth in rent prices also exceeded that of the inflation rates for consumer goods in Buenos Aires City. According to data from the Buenos Aires City Commercial Prices Index (IPCBA) used in the report, yearly inflation rates for consumer goods in the City reached 24.8 percent in the 12 months preceding August 2015.

The most expensive

The increase in rents in in Núñez and Retiro, where renting an apartment almost doubled across the study period, was insufficient for either to overtake Palermo or Recoleta, which remained the most expensive neighbourhoods in which to rent an apartment according to the report.

Average rent per person in a two or three bedroom apartment in a 50 square-metre unit was higher in Palermo than anywhere else in the City, at 6,427 pesos per month. Recoleta had similarly high rents at a 6,101 pesos-per-month on average.

Third and fourth highest in terms of total price, however, were those neighbourhoods in Retiro and Núñez, which recorded average monthly prices of 5,960 pesos and 5,810 pesos, respectively.

Meanwhile, just a handful of neighbourhoods accounted for the majority of the apartment space available to rent in the City.

“Palermo, Recoleta, Belgrano, Caballito, Villa Urquiza, Núñez and Almagro concentrated more than two-thirds of all rental space in the City in August 2015,” the report said.

In terms of recuperating investment on an average apartment of the City, the average time for a total return approached three decades in 2015. “In August 2015, the recovery rate for an investment in an average apartment with two used bedrooms (based on a unit of 50 square metres) was 27 years,” the report said.

Part of an article from the BA Herald

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