The segment of medium and high-standard real estate remains heated in 2023, even with interest rates at high levels in Brazil, according to the leading developers in the country.
At Bloomberg Línea’s request, five players pointed out the main bets for this market.
There are launchings with square meters valued at more than R$50,000 (US$9,665), as is the case of a JHSF project.
By comparison, the average value of the square meter in the city of São Paulo is R$10,226, according to the FipeZap+ Residential Sales Index report released in early February.
It is the fourth city with the highest average, behind Balneário Camboriú (R$11,534), Itapema (R$10,614), both in Santa Catarina and Vitória (R$10,444), the capital of Espírito Santo.
Rio de Janeiro (R$9,859) is in 5th place.
Due to the resilience of the higher income client to the effects of inflation and interest rates, the medium and high standard segment already represents about 30% of the annual sales of the sector, according to data from Abrainc (Brazilian Association of Real Estate Companies).
On average, Brazil sells about 157,000 properties a year. Of this total, the segment accounts for about 46,000 units.
“Over time, medium and high standard enterprises are gaining relevance in launches and sales, even before the rise in interest rates,” said André Oliveira, BB Investimentos analyst, in a report (see below for a complete analysis of the market panorama).
“Ultra-luxury continues to be a highlight for builders that can overcome the approval bottlenecks for this type of project in the city of São Paulo,” pointed out analysts Bruno Mendonça (Bradesco BBI) and Wellington Lourença (Ágora Investimentos) in a report.
The analysts cite JHSF and Cyrela (CYRE3) as the main listed players with a relevant track record in this niche.
“Recently, we have seen specific projects for this class from Tecnisa (TCSA3), Mitre (MTRE3), Helbor (HBOR3), and Tegra, among others,” they added.
Check out the main highlights of the five developers consulted in the report:
JHSF
Leader in the high-income sector in Brazil, JHSF bets on the recently launched Reserva Cidade Jardim, with delivery scheduled for the second half of 2026.
“It is the product with the highest price per square meter of JHSF; it will be a landmark in the city of São Paulo,” said the company.
The prices per square meter vary per unit but start at R$50,000 a square meter.
Located within a 20,000-square-meter green reserve, the floor plans range from 455 (R$22.750 million) to 1,300 square meters (R$65 million).
The development is inside the Complexo Cidade Jardim, in the neighborhood with the same name, in the south zone of São Paulo, where Shopping Cidade Jardim is located (the photo that opens this report is the perspective of the view).
The buildings have floor plans with a view of the city, and the owners will have access to the facilities of the Hotel Fasano, such as tennis, beach tennis, squash, and basketball courts, as well as a 25-meter swimming pool.
The project is signed by architects such as Sig Bergamin, Murilo Lomas, and Pablo Slemenson.
EZTEC
EZTEC, one of the largest real estate developers in the country, is playing its chips on Park Avenue, a 102-meter high tower in Moema (southern part of the city of São Paulo), 900 meters away from Ibirapuera Park.
The average price per square meter is R$45,000. The development has 44 residential units, with floor plans of 240 (R$10.8 million) and 298 square meters (R$13.4 million).
According to the company, the project also has 464 square meters (4 suites) or 579 square meters (4 suites) penthouses, but the prices of these units were not disclosed.
The delivery date is scheduled for August 2025.
The VGV (General Sales Value) of the 90-unit enterprise is estimated at R$500 million, and Fraiha Incorporadora is a partner of EZTEC, which has 50% of participation.
Park Avenue da Alameda dos Arapanés has infrastructure for electric car charging, suites with floor heating, a 25-meter pool, and a sauna, among other amenities.
TRISUL
Trisul invests in its brand “A Lifestyle Boutique by Trisul”, focused on high-standard works, such as Oscar Ibirapuera, designed by the São Paulo studio of the North-American Perkins & Will and awarded with the Architecture Master Prize (AMP) in the Residential Architecture Design category.
Besides Oscar Ibirapuera, Oscar Itaim, and Valen Capote Valente, Trisul’s brand turns to Vida Madalena, in the west zone, in land on João Moura street, in front of Baronesa da Bocaina Square.
The fourth Lifestyle Boutique project is Península Vila Madalena, priced at R$18,500 per square meter, with delivery scheduled for October 2025.
The Península Vila Madalena will have 25 floors and 96 units with exclusive elevators, besides 35 leisure items with an aquatic complex.
There are options for two suites, with 154.50 square meters, and three suites, with 193 square meters, besides four duplex units.
EVEN
Even, focused on high-standard developments in the west and south regions of São Paulo, plans to launch five projects this year, ranging from 200 to 800 square meters, in prime neighborhoods such as Moema, Brooklin, Jardim Paulista, and Alto de Pinheiros.
Without revealing values, the developer disclosed that the smallest project (200 square meters) would be at Duquesa de Goiás Avenue, in Brooklin, which will occupy an area of 10,580 square meters.
Rua Sabiá, in Moema, will have 74 units of 310 square meters, with four suites and a penthouse of 584 square meters, on a plot of 6,000 square meters.
At Manuel da Nóbrega street, in Jardim Paulista, near Ibirapuera Park, there will be 52 units of 236 and 317 square meters, besides duplexes of 376 and 496 square meters, with 3 to 5 suites.
In Alto de Pinheiro, the bet is on the avenue Diógenes Ribeiro de Lima, with 56 units of 327 square meters, in a land of 6,724 square meters.
Between Jardins and Pinheiros, at Diogo Moreira street, there will be 140 units from 200 to 800 square meters, with 3 to 5 suites, in a luxury international flag hotel, on 17.667 square meters of land.
MOURA DUBEUX
Moura Dubeux, which leads the high-standard market in the Northeast region, has indicated two significant projects: Casa Boris, in Fortaleza, Ceará, and Beach Class Marine, in Praia dos Carneiros, Pernambuco.
Casa Boris has an average unit price of R$2.684 million, with a square meter value of R$13,500.
There are two towers with 35 floors each, totaling 140 apartments with four suites of 163.93 square meters and 203.75 square meters.
The largest real estate developer in the Northeast closed 2022 with 12 projects launched, with gross PSV of R$2.2 billion and net PSV of R$1.9 billion, an annual growth of 68%, the best result in the company’s history, which accumulates 61 properties with a potential gross PSV of R$8.4 billion.
PROSPECTS FOR THE REAL ESTATE MARKET IN 2023
At B3, the IMOB (Real Estate Index), which gathers 17 representative sector stocks, shows an accumulated high of 3.41% for the year, surpassing the Ibovespa performance (+2.35%) until the closing of the last day 22.
Analysts warn, however, that the market is waiting for the definition of fiscal anchors and the steps for tax reform.
“In the sector, confidence indicators deteriorate, driven by concerns about high-interest rates. Still, in January, more than 400 thousand job openings were closed, 17% of which were in the construction sector.”
“On the other hand, more favorable inflation indicators partially offset the negative data mentioned above. Moreover, hiring with FGTS shows an increase for the 10th consecutive month”, said André Oliveira, an analyst at BB Investimentos, in a February report.
The sector should continue to be positive this year for Abrainc, representing 18 companies.
The association cites research made by Brain Inteligência Estratégica, with 1,200 Brazilians, that 31% of interviewed people want to buy a new property.
“Brazil still has a young age pyramid compared to other countries, which implies a high rate of family formation in the next years, and all this reflects in strong demand to the sector.”
“We also hope that the return of the Minha Casa Minha Vida program will increase access to housing for needy families, contributing to the fight against the housing deficit and to social inclusion for the lower-income population,” Abrainc president Luiz França said in a statement.
The Residential Real Estate Sector Confidence Indicator, conducted by Abrainc in partnership with Deloitte, closed 2022 with stability, with executives estimating that sales in real estate development will increase in the next 12 months and, in the first three months of 2023, will remain at the same level as in the last quarter of 2022.
With information from Bloomberg