After the IGP-M soars, FGV launches a new index for rent adjustment

IVAR ended 2021 down by 0.61%; in December, the rate rose 0.66%

Fernanda Carvalho/ Public PhotosSpecifically aimed at the real estate market, the new rate measures the monthly evolution of residential rents in the country

The countless disputes between tenants and homeowners may be out of date. After a series of impasses due to the IGP-M, index most used in contracts of rent, the Brazilian Institute of Economics of Fundação Getúlio Vargas (FGV) launched a new index for real estate leasing. Focused specifically on the real estate market, the rate measures the monthly evolution of residential rents in the country. In the first indication, the Residential Rent Variation Index (IVAR) rose 0.66% in December, against a high of 0.70% in November. The economist at FGV and responsible for the methodology, Paulo Pichetti, said that the IGP-M had already been abandoned in the calculation of rents.

“I imagine there will be a transition period where people will understand the IVAR methodology, this new index that is being launched, they will see its behavior, how it will evolve and they are free to adopt this index or any other, but I believe there are advantages in this for readjusting rental contracts and analyzing the real estate market,” he said. The IVAR does not consider the value of seasonal leases, but only new contracts and adjustments to existing contracts. With the deceleration in December, the new index ended 2021 down 0.61%.

*With information from the reporter Fernando Martins

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