The most recent indicators show that the Brazilian real estate market is emerging from the crisis that began in 2014.
The decrease of the discount rate in progress in the last three years, even if it did not cause a proportional decrease in the interest rates for loans for the purchase of the house, has certainly made the investment in real estate more attractive.
The better economic situation, with the consequent creation of new jobs and income, is bringing an increasing number of families on the real estate market looking for a first or a new home.
Some indicators of the recovery:
– the number of employees in the construction sector increases. In the period January-October 2019, 115 thousand new jobs were created, + 58% compared to the same period of 2018.
– in the city of Sao Paulo in 2019 there was a 60% increase in requests for building permits compared to 2018.
– estimated 20% increase in the property credit offer in 2019
– according to a research by Deloitte, 58% of Brazilian families are planning to buy a house in the next 5 years (in the previous five years the percentage was 37%)
The graph below (source: McKinsey – 2020 Opportunity Tree) shows that both the number of buildings placed on the market and the number of properties sold have been growing significantly in recent years, but have not yet reached the pre-crisis level.
The confidence index of economic operators in the construction sector (source: CNI, Bovespa, McKinsey) also shows a significant recovery, after reaching very low levels in 2016.
The interest rates applied by the Caixa Economica Federal for the financing of the purchase of a home are at historic lows: 6.5% per year, compared to 15.9% in 2016.
San Paolo – Residential market
In the Paulist capital there is a large number of “lançamentos”, that is, new buildings under construction, in the most noble and rich areas of the city: Vila Mariana, Pinheiros, Moema, Jardins and Itaim.
The average price per square meter of an apartment in the city of Sao Paulo was R$ 6,132.00 in December 2019 (source: Imovelweb), but in the most prestigious neighborhoods it can exceed R$ 20 thousand. In the central / southern area, the most valued, the average of a square meter of an apartment in good condition and well located is R$ 12,625.00 (about US$ 2900).
A good Paulista apartment with three rooms and 90 square meters costs about R$ 582 thousand (about US$ 135.000,00).
Rio de Janeiro – Residential market
In Rio de Janeiro, the most revalued neighborhoods are also the most popular ones: Leblon, Ipanema and Lagoa, in the southern area. The apartments can exceed R$ 20,000 per square meter.
The average price per square meter in the whole city was R$ 7,707.00 (December 2019, source: Imovelweb).
In the southern area, the most valued, the average of a square meter of an apartment in good condition and well located is R$ 12.967,00 (about US$ 3000,00).
A good carioca apartment with three rooms and 95 square meters costs about R$ 732 thousand (about US$ 170.000,00).
There are therefore all the prerequisites for a substantial growth of the market in 2020: excellent news for the Brazilian economy and also an opportunity for those who want to invest in real estate, especially considering that prices in dollars and euros are very affordable due the weakness of real.