Brazil’s real estate financing boosts sales and may hit record in 2021
RIO DE JANEIRO, BRAZIL – Between 2019 and 2010, real estate credit increased by almost 60%, breaking an all-time record. In 2021, the outlook seems even better, with a projected R$160 (US$30.2) billion – almost R$40 million more than the amount financed in 2020 – with a trend towards breaking a new record, despite the pandemic.
The drop in interest rates has favored this growth. The rates, which stood at 11% in 2016 for this type of loan, have dropped to the current 6%.
The pandemic has led to wealthier households increasing savings. While part of the population lost their jobs or had their wages reduced, others began to save, no longer spending on transportation and eating out.
Consumption drops and people find themselves with extra money in their savings accounts. According to the Central Bank, net savings accounts reached around R$110 billion.
The coronavirus crisis has also changed the search for real estate. Demand for larger properties away from cities has increased.
While some invest in their own larger home, others buy properties to rent out and generate extra income. One buying alternative is through real estate auctions. Many auctions are held online.
Another option for those who are in no rush is to buy properties while under construction. Payment is facilitated with low interest rates and there is still great potential for appreciation.
At a more affordable price, one can bet on the property’s future value. In this case, one should research the construction company’s reputation thoroughly, to ensure that the work is delivered and will not turn into a major problem.
The luxury real estate market is also booming. Balneário Camboriú in Santa Catarina state is now called the Brazilian Dubai. With its tourist attractions, high-end property developers have focused on the region. Property valuation in the region is growing, despite the pandemic. The low interest rate combined with the increase in real estate credit by institutions is boosting the purchase of high-end properties.
New technologies have helped the real estate sector to keep up. While in the past people relied on newspaper ads, signboards outside properties, and contacts from acquaintances, nowadays online platforms rule.
Many platforms now offer 360-degree images of properties, and contracts are signed online, as well as follow-up negotiations. Real estate financing is boosting sales, while technology is simplifying the whole process of acquiring a property.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief