Microeconomic study on the behavior of real estate market in the city of Rio de Janeiro between 2008 and 2010

Abstract

This article aims to study the housing market in the city of Rio de Janeiro, on a microeconomic perspective. Data are related to periods of months from January to November in the years of2008, 2009 and 2010 and were extracted from the Real Estate Market Overview published by Secovi-Rio . It has also been used data on the occupation of properties in each neighborhood, obtained by the 2010 Census. The neighborhoods of Bangu, Barra da Tijuca, Botafogo, Centro,Copacabana, Flamengo, Gávea, Ipanema, Jacarepaguá, Jardim Botânico, Lagoa, Laranjeiras, Leblon, Méier, Recreio dos Bandeirantes, Vila Isabel and Tijuca are analyzed in this article. There are made some analysis of correlation between the available variables and have been calculated in this article the price elasticity of demand for each neighbourhood. The result of this work observes the existence of a strong correlation between the amount of real estate transactions and the amount of property that a neighborhood has, as well as the existence of a negative correlation between the number of transactions and the occupancy rate of properties in each neighborhood. In addition, the study indicates that only four of the districts analyzed are elastic relative to demand (Center, Flamengo,Vila Isabel and Leblon) and that the price elasticities of demand for all districts analyzed are not directly associated with the profiles of these localities, nor to the geographical location of them, so that intense variations of elasticity occur in nearby neighborhoods because of specific local factors.