Brazil Residential Sales Down for Sixth Straight Month

By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – According to the latest FipeZAP residential real estate sales index, which tracks prices in Brazil’s twenty biggest cities, residential real estate sales prices maintained its downward trajectory in August, registering a marginal decline of -0.12 percent.

August’s decline represents the sixth consecutive month of nominal decreases, resulting in a total decrease of -0.5 percent for 2017.

Charlie Jonas from luxury real estate agency, Rio Exclusive, explained, “As expected market prices have been going down and hopefully will continue to do so. After years of booming thanks to the World Cup and the Olympics that saw real estate prices surge, the crisis that followed made real estate prices more ‘reasonable’.”

“The beginning of the year saw a few good months in terms of volume of sales and the low season was pretty quiet with little movement which has led owners to bring their prices down further in order to attract clients,” said Jonas.

Six of the twenty cities surveyed in August showed increases, with the largest seen in Florianópolis (0.66 percent), Recife (0.46 percent) and São Paulo (0.18 percent). But, only Florianópolis and Recife were barely able to outpace August’s expected inflation rate of 0.44 percent, as measured by the IPCA/IBGE (National Consumer Price Index/Brazilian Institute of Geography and Statistics).

Of the twenty cities surveyed, fourteen showed nominal declines in residential real estate prices from July to August, with the largest variations registered in Distrito Federal (-0.58 percent), Rio de Janeiro (-0.53 percent) and Goiânia (-0.49 percent).

The average price per square meter in Brazil for August was R$7,643. As expected, Rio de Janeiro once again had the most expensive residential real estate sale prices in the country. The Cidade Maravilhosa had an average sale price of R$9,975 per square meter.

Along with having the most expensive residential sale prices in Brazil, Rio also had the three most expensive neighborhoods. Rio’s upscale neighborhood of Leblon was the most expensive, with real estate sale prices clocking in at R$21,012 per square meter. Not too far behind was Ipanema at R$19,744, and Lagoa at R$17,976.

In August, São Paulo closed the gap between itself and Rio with average prices rising to R$8,696 per square meter. Vila Nova Conceição had São Paulo’s most expensive real estate sale prices, at R$16,571 per square meter. Next was the neighborhood of Jardim Europa at R$15,530, followed by Jardim Paulistano, at R$15,027 per square meter.

Looking at the last twelve month period, eleven of the twenty cities that were surveyed showed nominal declines in residential sales prices, with the worst declines seen in Fortaleza (-3.24 percent), Rio de Janeiro (-2.94 percent) and Distrito Federal (-2.75 percent).

Of the cities that showed increases in the last twelve months, only two showed a higher variation than the accumulated rate of inflation of 2.71 percent: Belo Horizonte, with prices rising 5.13 percent and Florianópolis, with prices increasing 3.03 percent.

The FipeZap Index monitors real estate sale prices across twenty Brazilian cities and is a monthly gauge of real estate prices. It is prepared jointly by the university research center, Fipe (Economic Research Institute Foundation) and the Brazilian online real estate platform, Zap Properties.