Brazil’s Residential Rents Dip in May Still Up 5.11% Over 12

Brazil’s residential rental market, tracked by the Residential Rent Variation Index (IVAR) from FGV Ibre, posted a 0.56% decline in May 2025. Despite this monthly drop, rents remain 5.11% higher than a year ago, reflecting persistent pressures in the housing sector.

The IVAR, launched in 2022, measures real prices from actual rental contracts in major cities, offering a more accurate picture than traditional indices based on advertised prices.

This recent decline contrasts with the trend earlier in 2025, when rental prices in São Paulo and Rio de Janeiro reached record highs. In April, São Paulo’s average rent hit R$68.83 per square meter, a 9.11% annual increase, while Rio de Janeiro reached R$45.33 per square meter, up 10.44% year-over-year.

These figures, from the QuintoAndar Imovelweb Rental Index, show that tenants have faced shrinking bargaining power as demand surged and discounts nearly vanished.

In São Paulo, average discounts fell to 2.7%, the lowest on record, while Rio de Janeiro offered no discounts for the third time ever. Most properties now lease at or above the asking price.

Brazil’s Rental Market

The IVAR’s May reading suggests a pause in the upward march, but the broader context remains challenging for renters. FipeZAP data for 2024 showed a 9.23% rise in residential rents nationwide, far outpacing the 2.87% general inflation rate.

Smaller apartments, especially one-bedroom units, saw the steepest increases, with São Paulo leading the country at R$55.69 per square meter.

Regional disparities persist. While São Paulo and Rio de Janeiro have seen the most dramatic price hikes, other cities like Porto Alegre and Belo Horizonte also reported notable increases.

In August 2024, the IVAR showed a 1.93% monthly rise and a 12-month gain of 9.97%, underlining the volatility of the market. High interest rates and limited new housing supply have pushed more people into the rental market, intensifying competition.

At the same time, new tax rules and inflationary pressures continue to shape the sector’s outlook. The IVAR’s more recent dip may offer temporary relief, but the underlying trend points to a market where landlords hold the advantage and affordability remains a concern for many Brazilian families.