Rental prices in Rio are known to be high, while the quality of apartments is low. This was especially true 3-4 years ago, when Brazil was still seen as one of the fast growing BRIC countries. The recent decline in economic growth and low valuation of the R$ made Rio an affordable city to live in.
While real estate value for apartments in top locations would increase with over 20% a year about 5 years ago, real estate values or now declining, rapidly. It gets harder and harder for real estate owners to rent out their apartment. Many of them, finally, start to understand that lowering their prices is a necessity.
There remains a huge difference in rental cost/month when you compare long term contracts vs short term (holiday) rentals. Rio is very popular with tourists around the world, and with the Olympics in 2016, only more tourists are expected.
My current cost of living, excluding trips and short travels. Short term rentals only:
1 bedroom apartment in a top location (Ipanema), all bills included 760 €/$850
Food (including eating out once/day) 500 €/$560
Gym 18 €/$20
Entertainment, (3-4x drinks/week, some more exclusive dinners) 600 €/$675
This brings my average cost/month for living in the Cidade Maravilhosa: €1878 or $2000.
While I used to get 2,5R$ for 1 euro a couple of years ago, I now get 4,45R$ for the same euro. Living in Rio became a whole lot cheaper.
Rio offers more than beaches. The Atlantic rainforest in and around the city offers great walks which never get boring.
Notes: I could easily find a place for around 2500R$/month (550 euro/$620) if I would opt for a long-term (at least 12 months) rental.
Eating out for lunch or dinner, in most restaurants in Ipanema, will cost you around 22€/$24 for two. You can cut down on expenses if you opt for the executive lunches, or more local restaurants.
If you are looking for something more stylish, you can enjoy a great dinner in a 1 star Michelin restaurant, for two @Mee, Copacabana Palace for around 140€/$160.