Ivar: all about the residential rent variation index

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The Residential Rent Variation Index (IVAR), developed by the Getúlio Vargas Foundation (FGV IBRE), is an indicator that measures the monthly evolution of residential rent prices in four Brazilian capitals: Belo Horizonte, Porto Alegre, Rio de Janeiro and São Paulo.

Based on data from rental contracts obtained from property management companies, this index analyzes the values ​​of new contracts and adjustments to existing contracts, thus capturing the prices actually practiced in the rental market, rather than advertised prices.

This approach provides a more accurate view of rent variation that reflects real supply and demand dynamics.

IVAR contributes to economic analysis by offering a detailed and transparent measure of residential rent inflation, a relevant factor for calculating general price indexes.

Furthermore, as highlighted by Luiz Guilherme Schymura, researcher at FGV IBRE and PhD in economics from Fundação Getúlio Vargas, it is expected that “IVAR can also be useful for Brazilian policy-makers”

That is, the positive assessment of the impact of this kenya whatsapp data new indicator for more precise adjustments in fiscal and monetary policies, given that it influences variables such as the spending cap and the indexation of social and pension benefits.

Although it is not yet widely adopted as an official index for rental contracts, this new index represents an important advance in the measurement of rental prices in Brazil , offering a methodology that seeks greater adherence to the economic reality of the sector.

How is the IVAR calculation done ?
The calculation of the Residential Rent Variation Index is carried out based on the effective variation in rental prices in current contracts , thus reflecting values ​​actually practiced in the market.

FGV IBRE collects data directly from residential contracts and the index is calculated based on a weighted average of rental variations in four capitals: São Paulo, Rio de Janeiro, Belo Horizonte and Porto Alegre.

When evaluating this data set, researchers consider quarterly adjustments, which thus provide an average of the change over 12 months .

In this way, the new index on residential rentals offers a more accurate measure of inflation in the value of contracts. The index methodology allows FGV IBRE and other institutions, such as IBGE and Fipe, to enrich the data set that guides economic and political decisions in Brazil.

The importance of IVAR in the real estate market

This new index for measuring the evolution and fluctuation of residential rental contract values ​​presents a set of advantages that range from greater knowledge of the behavior of the real estate market to the possibility of reworking tax policies.

Essentially, the index fills an important gap, given that previous indicators, based on rental offers, sometimes do not effectively express the contracted values.

Thus, by capturing data directly from signed contracts, IVAR offers a more realistic basis for economic and financial decisions , affecting, for example, inflation calculations that guide monetary and fiscal policies.

These aspects influence, for example, the practice of renegotiating contracts. Imagine the following scenario: a property owner/real estate agency with a property for rent in São Paulo, for example, could use the index to evaluate the proposal for rent adjustment .

If the index shows that rents in the region have varied more than expected, it is possible to present concrete and objective data when preparing a contractual amendment or even directly using the adjustment – ​​depending on the structure of the lease agreement.

The same scenario can be analyzed from another angle. Considering the readjustment proposal presented by the owner, evaluating the index, the tenant could signal whether or not he or she would adhere to the new value, taking into account the actual market behavior assessed by FGV.

Furthermore, for investors, IVAR provides a more detailed view of rental dynamics , assisting in economic analysis and decision-making and strategic moves in the real estate sector.