Paraguay’s Rental Market Faces Challenges Amid Rising Prices and Informality

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Paraguay’s rental market is undergoing changes. Prices are rising, but demand is affected by informality and over-indebtedness.

The rental market in Paraguay exhibits a complex dynamic shaped by the Rental and Leasing Law 1,295. Although the legislation ties price adjustments to year-on-year inflation, which reached 3.8% in December, in practice, the market operates with greater flexibility, especially in the private and informal sectors.

Data from the National Statistics Institute (INE) reveal that approximately 538,000 people, equivalent to 9% of the Paraguayan population, reside in rented properties. This segment is subject to a Value Added Tax (VAT) of 5% for housing and 10% for commercial premises.

In Asunción, the market shows a significant increase in prices. A one-bedroom apartment in new buildings reaches G. 3,800,000 monthly, while two-bedroom units are priced at G. 5,800,000, evidencing an increase compared to June 2023, when values were considerably lower.