Belo Horizonte Tops Brazil’s Rental Price Rise in 2023

In 2023, rental prices in Brazil’s major cities soared, as shown by the latest QuintoAndar Imovelweb Rental Index.

This report, released on Friday, highlights Belo Horizonte’s remarkable growth. Here, the cost of renting per square meter jumped by 22.8%, reaching R$ 33.73.

Yet, São Paulo still had the highest rental costs, averaging R$ 59.82 per square meter. Brasília came next, with prices at R$ 43.46 per square meter.

Every city surveyed saw higher rental prices, the most since the index started in 2019. “High interest rates, over 13% until August, made people delay buying homes.

Following Belo Horizonte, the cities of Curitiba, Rio de Janeiro, Porto Alegre, Brasília, and São Paulo also experienced significant price increases:

• Curitiba: R$ 30.10 to R$ 36.43, a 21.03% increase.
• Rio de Janeiro: R$ 34.26 to R$ 39.09, a 14.11% increase.
• Porto Alegre: R$ 28.22 to R$ 32.12, a 13.83% increase.
• Brasília: R$ 38.72 to R$ 43.46, a 12.24% increase.
• São Paulo: also saw high price hikes.

“High-interest rates, over 13% until August, made people delay buying homes. This increased rental demand and prices,” explained Thiago Reis, data manager at Grupo QuintoAndar.

Reis expects rental prices to keep rising.

“2023 was tough for new renters, with prices going up faster than inflation, but great for landlords. Low property availability and high rental demand will likely sustain this market growth.”

Rental prices to keep rising

This trend should persist into early 2024. But as the basic interest rate, Selic, drops, a shift to home buying might slow down the rental market.
Index Methodology

The QuintoAndar Imovelweb Rental Index, released monthly, tracks price changes in rental ads and agreements. It produces an average price for each neighborhood and city.

The data is balanced to create a city-wide index.

Areas with more rentals heavily influence the overall index. The final figure is a balanced, smoothed average of prices from past months, QuintoAndar reports.

The index uses a flexible price model, factoring in property features and location. To fine-tune the index, it considers aspects like size, parking spaces, and school proximity.