Brazil Residential Sales Show Marginal Decline in July

By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – According to the latest FipeZAP Index, which tracks real estate prices in Brazil’s twenty biggest cities, prices in Brazil’s residential real estate sales market registered a slight decline in July of -0.15 percent.

July’s marginal decline represents the fifth consecutive month of nominal decreases in the country’s volatile residential real estate market, resulting in a cumulative decline of -0.38 percent in 2017 so far. That figure is also below the rate of inflation for the period, as measured by the IPCA/IBGE (National Consumer Price Index/Brazilian Institute of Geography and Statistics), of 1.34 percent.

In July, six of the twenty cities surveyed outpaced the IPCA/IBGE’s expected inflation rate for the month of 0.15 percent. Of those six cities, the biggest increases in July were seen in Florianópolis (0.65 percent), Santos (0.41 percent), Recife (0.37 percent), and Curitiba (0.30 percent).

By contrast, twelve of the twenty cities showed declines in residential real estate prices from June to July, with the biggest drops seen in Rio de Janeiro (-0.53 percent), Distrito Federal (-0.47 percent) and Salvador(-0.45 percent).

The average price per square meter in July was R$7,654. And, despite showing the survey’s biggest decline of the month, Rio de Janeiro once again led the way with the most expensive residential real estate sale prices in the country. The Cidade Maravilhosa had an average sale price of R$10,028 per square meter.

Trailing Rio de Janeiro was Brazil’s financial capital, São Paulo, which showed no change from June to July with an average price per square meter of R$8,680. São Paulo was followed by Distrito Federal at R$8,345 per square meter.

The cities with the lowest average residential real estate value per square meter were Vila Velha at R$4,651, Goiânia at R$4,118 and Contagem at R$3,529.

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

In São Paulo, Vila Nova Conceição had the city’s most expensive real estate sale prices, at R$16,480 per square meter. Next was the neighborhood of Jardim Europa at R$15,120, followed by Jardim Paulistano, at R$14,727 per square meter.

Looking at the last twelve months, nine of the twenty cities that were surveyed showed nominal declines in residential sales prices, with the worst declines in Rio de Janeiro (-2.59 percent), Niteroi (-2.45 percent), Distrito Federal (- 2.32 percent), and Fortaleza (-2.14 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 2.62 percent. Belo Horizonte, the city that registered the biggest increase in the period, outpaced inflation with prices rising 5.95 percent. The other city beating inflation was Florianópolis, with prices increasing 3.31 percent over those twelve months.

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.