By Ruth Faulkner, Contributing Reporter
RIO DE JANEIRO, BRAZIL – A survey by Secovi-Rio, the city’s housing union, shows that ten out of eighteen neighborhoods in Rio saw a fall in rent in March 2015, when compared to February of the same year. This demonstrates a more significant drop than when compared to March 2014, where a decrease can be seen in eight locations. The analysis is based on “standard apartments” with one to four bedrooms.
Vice president of Secovi-Rio, Leonardo Schneider, analyzed the situation, suggesting that the real estate market in Rio de Janeiro is experiencing a period of transition and adjustment. “We had a very strong appreciation in recent years and this is changing a bit, mainly because there is more supply in the market and demand has decreased. We have seen more listings entering the market,” he said.
Rio’s Centro registered the highest rent reduction in March, with a decline of 9.68 percent, while it was also the neighborhood that showed the largest decline of house sales over February 2015, with a drop of 1.26 percent. Lagoa recorded the largest drop in sales prices over the last twelve months with 1.44 percent.
“The price for sale in Centro has had stronger adjustment periods [than other neighborhoods]. It has taken more time to sell a property,” Leonardo Schneider explained.
When looking at the annual comparison in rent prices, Gávea, in Zona Sul (South Zone) has seen the largest regression with 6.81 percent. “[Prices in] Gávea rose because of expectations of the metro, and it was an interesting alternative to high priced Zona Sul areas Leblon and Ipanema,” Schneider stated.
“However, [now] a year later, these prices have dropped as if it was a wave,” he reveals. In January, the Gávea metro station was reported to only open after the Olympic Games, leaving an impact on the real estate market.
Another neighborhood in Zona Sul, Flamengo, has seen the highest rise in rent, with a 7.12 percent increase over the last twelve months. While the Zona Oeste (West Zone), the neighborhood of Recreio has seen the highest demand and a rent increase of 2.64 percent, compared to February 2015.