The IGP-M soaring pressures the housing market

Historically, the IGP-M has been the index of lease contracts

04/30/2021

According to data released this Thursday (04/29), by the Getúlio Vargas Foundation, the General Market Price Index (IGP-M) of April 2021 increased by 1.51%. It represents a slowdown in comparison to the 2.94% recorded in the previous month. With this result, the inflation that corrects the rental contracts reached 32% in the 12 months ended in April. Therefore is the index that will update the contracts due in May. As a comparison, in April 2020, the index had risen 0.80% and accumulated an increase of 6.68% in 12 months.

Historically, the IGP-M has been the index of lease contracts. The IGP-M indexes the vast majority of lease agreements in force. Gustavo Favaron, CEO of the GRI Club, a specialist in the real estate market, comments that with the rise of the IGP-M observed in the last 12 months, on the one hand, many owners have tried not to pass this adjustment on in its entirety. “Given the chaos that the pandemic has brought to so many companies as well as individuals, on the other hand, these owners often have financial obligations with banks and others, and for that reason, in some situations, it is more difficult not to pass on the full readjustments ”, he says.

Read the full story (in Portuguese).

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