Milei's reform: Boom in the Argentine real estate market

Argentina's President Javier Milei is deregulating the housing market. Numerous state regulations previously hindered landlords. Now the supply on the market has increased significantly.

Since taking office, Argentina's President Javier Milei has pursued a radical policy of deregulation. With a decree right at the beginning of his term, he also liberalized rental law. Until then, there were numerous restrictions for landlords.

The minimum term of rental contracts was three years, landlords could only ask for a deposit of one month's rent and, what was particularly absurd, there was an extremely strict rent cap; landlords could only ask for rent increases once a year. In a country where inflation rates are in the triple digits, this hardly means that rental apartments are profitable.

The government regulations went so far that it was no longer profitable for most landlords to rent out apartments, but instead left them empty. With Milei's deregulation decree, the situation changed quickly. A joint report by the company Mercado Libre and the University of San Andrés found that just one month after Milei took office in December, the housing supply had doubled. By June, the supply had more than tripled compared to December. Before that, the monthly report had seen a stagnating housing supply for years.

For landlords, it no longer seems to be worth it to keep properties vacant. There is now significantly more supply for tenants. However, with the suspension of the rent cap, rents are of course rising more than before. Nevertheless, the majority of people in Argentina seem to be optimistic about economic development, as recent surveys show.

Expectations of their president are high. A little over a year ago, Milei became the top favorite for the presidency in the presidential primaries. His voters then and in the main election were disappointed with the two established parties, but his new economic concept had won them over. The South American country has been suffering from galloping inflation for years. The poverty rate is very high.

Accordingly, Milei's government must deliver. It has already achieved initial successes: The inflation rate recently fell to long-term lows, while wages rose. Nevertheless, the libertarian president is still under pressure. The recovery from the eternal recession has only just begun.

Source: Apollo News