According to a Bloomberg article, rental prices in Rio de Janeiro fell last month for the first time in more than three years as Brazil’s economy struggles to gain steam and state-run oil company Petrobras cuts costs.

Prices in the beachside city, host of the 2016 Summer Olympics, fell 0.1 percent last month, according to a housing index by economics research institute FIPE. It was the first contraction since June 2010, said the Sao Paulo-based FIPE, which bases its index on apartments listed by real-estate website ZAP Imoveis.

While prices to buy and rent in Rio’s most sought-after neighborhoods have jumped six-fold in the past decade, rising to levels that rival New York and Paris, demand this year has been cooling amid a plunge in the real, above-target inflation and weak growth. Also weighing on confidence is cost-cutting at Rio-based Petrobras, Brazil’s second-biggest company by market value. The cutbacks have had a cascading effect on suppliers.

“When Petrobras takes its foot off the gas, everything slows down,” said Ron Radnik, owner of Focal Point Relocation Services, which caters to foreigners moving to Rio to work in the oil industry. “This is good news because when people get here and they see how expensive it is they say, ‘Holy Cow.’”

Source: Bloomberg

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