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By Jay Forte, Contributing Reporter

RIO DE JANEIRO, BRAZIL – The IPCA inflation index reached 10.32 percent in February over the last twelve months, while Rio de Janeiro rental list prices fell 9.07 percent in the same period, according to a new FipeZap report released yesterday (March 15th). This means that while Rio rental prices have dropped twenty percent in adjusted terms over the last year, it has remained almost level since last month.

Leblon and Ipanema Real Estate, Rio de Janeiro, Brazil News
Leblon and Ipanema still have some of the highest real estate prices in Brazil, photo by Fernando Maia/RioTur.

The new report showed the average rental price in eleven Brazilian cities remained stable in February in relation to January, after nine months of decline. The FipeZap index only takes into account the prices advertised on the Internet on new rentals across the country.

The biggest drop in the month of February from January was in Porto Alegre (-1.06 percent), followed by Belo Horizonte (-0.60 percent) and Rio de Janeiro (-0.08 percent). In contrast, the rent in Curitiba rose 1.05 percent in February, 1.03 percent in Campinas and 0.72 percent in Salvador.

All cities present in the index showed results below the inflation in the twelve month period, with Rio de Janeiro the largest with a 9.07 percent drop, followed by São Paulo (-5.14 percent), Santos (-0.96 percent) and Federal District (-0.27 percent).

Even with the twelve month drop in list prices in Rio, it is still at the same level as January-February 2013, and continues to be almost 120 percent over the rates in 2008 when the index was created.

This leads many to speculate there is still more to fall in Rio, but the February Carnival season and upcoming Olympics may be propping up prices in the short term.

The highest prices by square meter were in Rio de Janeiro, at R$37.42, following is São Paulo at R$35.45. The least expensive are in Curitiba (R$16.73) and São Bernardo do Campo (R$18.94).

Listed rental prices reflect Brazil’s standard thirty-month leases and do not include condominium fees and IPTU taxes, which can potentially be up to R$1,000-R$2,000 per month.

Also not included is a “seguro fiança“, a type of renter’s insurance often required for long-term leases when a fiador (guarantor) is not available, although in Rio a 2-3 deposit is starting to become more common.

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