Residential Rent Change Index rises 0.76% in April

Economist Luis Oreiro, from the Department of Economics at the University of Brasília, explains the reasons that led to this scenario of deceleration in the Rent Variation Index. “The reason for the deceleration of the Rent Index, which captures rent inflation, is directly related to the behavior of the IGPM. By law, rental contracts must be readjusted annually by the General Market Price Index.”

From March to April, two of the four cities that make up the IVAR showed a decrease in the indicator. In the last month, Rio de Janeiro recorded a drop of 0.25%. In Belo Horizonte, a reduction of 3.83% was noted. On the other hand, São Paulo had an increase of 2.30%, while Porto Alegre, of 1.24%.

When the comparison is made between April of this year with the same month of last year, Rio de Janeiro and Belo Horizonte again present a decrease in the indicator. While the Rio de Janeiro capital went from 10.24% to 9.63%, Minas Gerais went from 14.79% to 10.48%. São Paulo rose from 7.32% to 8.41%; while Porto Alegre went from 6.95% to 7.40%.

Downsizing trend

According to economist Oreiro, the tendency for the coming months is for a reduction in the index.

“The IGPM accumulated over the last 12 months has slowed down, even last month it had a negative variation and the Index fell basically for two reasons. Firstly, because there was an appreciation of the real against the dollar as per the IGPM. When the real appreciates against the dollar, then many goods drop in price because they are imported or extractable, so their price ends up being cheaper in reais”.

The IVAR is the indicator that measures the monthly evolution of residential rent values ​​in the real estate market in Brazil. The next release by FGV-IBRE is scheduled for June 7th.