The number of rental units in the Argentine capital, Buenos Aires, has doubled, and prices fell by 20 percent following President Javier Milei's historic decree deregulating Argentina's economy. 

“In December, after Milei's announcement, that number doubled. Today, we have a stock of more than 800 apartments, and it grows every day,” said Alejandro Bennazar, director of Institutional Relations at the CIA.

The newspaper's report details that the greater supply of units, together with the possibility of freely negotiating a contract between the parties, which was impossible with the previous regulation, had a direct impact on the drop in prices.

“If the update is monthly, no matter the adjustment index used, rental prices were reduced from 20% to 30%, compared to the values of November and December,” said Daniel Salaya Romera, owner of one of the real estate agency Salaya Romera Propiedades. “If the contract is signed with bimonthly adjustments, the values decrease, on average, 15% compared to December.”

BACKGROUND: Argentina's Javier Milei Unveils His 'Austerity Budget' to Crush Inflation and Crony Capitalism – RedState

Just four months ago, the situation was much worse, and there was no hope of improvement. The rental environment was in the grips of a perfect storm of hyperinflation and micromanaging government regulation. The inflation of 100%-plus per year could be managed, but when the government passed a law requiring leases to be three years long and rent increases to be capped at the rate of inflation, the market collapsed.

Here again, we find the phenomenon of "unexpectedly" rearing its ugly head.

UNEXPECTEDLY: ADV. FREQUENTLY USED BY PEOPLE WHO DON’T KNOW WHAT THEY ARE DOING, TO DESCRIBE UNPLEASANT EVENTS OR SITUATIONS THEY HAVE CREATED.

But in one global metropolis, rents are surging like never before. Tenants in Buenos Aires City are seeing apartment prices soar 67 percent from a year ago to an average of about 35,000 pesos a month (US$377). Rent is now rising twice as fast as paycheques, and well ahead of other prices in one of the largest cities in Latin America.

“We never imagined rents going over 60 percent, nobody planned for this,” says Leandro Molina, commercial director at ZonaProp, one of the top online real-estate platforms in Argentina. “It’s the biggest increase on record.”

...

But it’s also the unintended consequence of rental reform passed by the national government last year that was meant to stabilise prices and protect tenants. Starting in July, Argentina’s Central Bank will publish an index that indicates how much rent can legally increase. And since landlords in Argentina's capital 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, according to local realtors.

The new law also stipulates that rental contracts will be stretched out to three years with price increases limited to once a year. Currently, a common rental agreement lasts two years, and landlords often increase prices every six months as part of the terms outlined in the contract. But with so much economic uncertainty in Argentina, landlords and tenants have traditionally negotiated how much rent would increase.

Many landlords simply folded. They realized they couldn't make money under the government's regulatory scheme and sold their property for dollars or otherwise took it off the market.

This is the kind of small yet politically vital success Milei needs to give people hope that his policies offer a way out of the Peronist sh**hole that 60 years of populist/socialist policies have created. Inflation spiked to 211% as he was being sworn into office.

READ: Argentina's New President Is Probably Doomed to Fail but the Path Will Be Glorious 

As we know from the 1980s, wringing regulation and inflation out of an economy is damned hard, and it is painful for the working and the professional classes. It can only be done by showing the electorate a light at the end of the tunnel. Doubling the available rental housing in Buenos Aires while reducing the price is a great first step.