The imbalance of high demand and low supply has pushed Fortaleza rental rates up to the extent that by June, their rise was five times the inflation rate. Between January and June, rents in the city increased by 13.5%, while inflation rose by just 2.6%. Analysts predict a continuation of rental hikes as economic confidence grows.
High demand vs low supply
The latest FipeZap Index for rental rates in Fortaleza shows that prices in the city continue to rise. In the first six months of this year, they went up by 13.5% to an average square metre price of R$26.41.
The figure concurs with the general trend in Brazil of rising rents. In April, market commentators predicted “high levels of rent growth” in 2023, and the latest statistics confirm this trend.
In Fortaleza, rental properties are currently in high demand, but the market has low supply options. This resulting imbalance is pushing rentals up ever higher, at a rate that quintuples inflation.
Economic recovery behind the rise
Analysts point to the economic recovery as the main driver behind increased rental demand. “As the economy gradually returns to pre-pandemic levels, rental properties become highly sought-after again,” said Ricardo Coimbra, an economist quoted in Diario do Nordeste.
As a result, the market heats up and pushes prices higher. Coimbra believes that this trend will continue over the next few months. “Fortaleza rental rates are likely to increase ahead of inflation, a trend that will persist if there’s no growth in supply,” he said.
Fortaleza rental rates high but among the cheapest in Brazil
Within the context of rising rates, Fortaleza rentals still represent some of the least expensive in Brazil. In June, the highest rents were in Barueri in Sao Paulo at R$53.14 per square metre, followed by SP generally at R$48.92.
Fortaleza had the fifth cheapest rentals in Brazil, with an average square metre price of R$26.41. However, the FipeZap Index showed a 1.1% uptick in June alone, a figure that took the annual rise to 21.2%. This increase is among the highest in the country.