The IGP-M (General Market Price Index), used as a reference to adjust the values of inflation-related contracts, such as real estate rental contracts, varied by 1.24% in March. The rate represents an acceleration compared to February, when the indicator was 0.04%.
With this result, the IGP-M has accumulated a variation of 6.81% in the last 12 months. In March 2019, the index was 1.26%. The data was released today by FGV (Getulio Vargas Foundation).
The IPA (Broad Producer Price Index), which accounts for 60% of the general index and measures the variation in wholesale prices, rose 1.76% in the month, against a deflation of 0.19% in February.
Rent inflation
However, contributing to this movement, the Raw Materials group extended the increase to 4.77% in March, compared to 0.36% in the previous month. Although this was driven by the items iron ore, soybeans and coffee. In turn, the CPI (Consumer Price Index), with a weight of 30% on the general index, slowed the increase to 0.12% in March, compared to 0.21% in the previous month.
The Education, Reading and Recreation group contributed most to the cooling of the IPC, as it went from a high of 1.04% in February to a drop of 1.0.
Although amid the coronavirus pandemic worldwide, airfare prices were an important factor in this reading. Therefore, they fell 10.26%, compared to a gain of 0.34% previously. In short, the National Construction Cost Index (INCC) rose 0.38%, compared to an increase of 0.35% in February.
There is guidance from both the FGV professor and the rental administrators, so that owners and tenants should avoid a conflict in court at all costs at this time.
Also, remember that owning a property does not automatically mean having a lot of money. The owner could be a retired old lady who lives off the rent every month. And if she doesn't get paid, she will be the one who will be in need.