Housing Sales in São Paulo Plunge 16 Percent in March

By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – On Tuesday, May 10th, the São Paulo State Housing Syndicate (Secovi-SP) released the results of its most recent survey showing that new housing sales in São Paulo for March 2016 totaled 1,070 units, a 16 percent decrease compared to March 2015. Despite the March result, the first quarter of 2016 saw an increase in total residential units sold in the state capital, 2,856, a 4.4 percent increase over the first quarter of 2015, according to an O Globo report.

Nevertheless, the volume sold in the first quarter of 2016 was still well below the average volume of units sold over a ten-year period, from 2004 to 2015, 5,500 units.

Also according to the Secovi-SP study, the city of São Paulo ended March with 25,823 residential properties available for sale, below the average of the previous twelve months, 27,000.

For the year, the global sales value (VGV), the sum of the potential sales value of all units, also decreased 10.5 percent to R$645.7 million.

“The first three months of the year continued the trend observed throughout 2015,” said the Secovi-SP’s President Flavio Amary in statement, “Most of the movement is among lower value two-bedroom units, which results in the reduction of the overall amount sold in São Paulo.”

In March 2016, only 565 residential units were launched in the state capital, representing a 26.9 percent fall from March of last year. In the first quarter of 2016, the number of new units launched fell to 1,692 units, 23 percent lower than the same period of 2015 and its lowest level since 2004.

Continuing a trend already seen in Rio de Janeiro, according to Secovi-SP, the drop in new units launched is related to the lack of confidence in the Brazilian political and economic environment, in addition to changes in state legislation.

Once the impeachment process is completed, Secovi-SP’s expectation is that the confidence in the housing market will gradually return and hopefully reverse this trend.

“So in the coming months, we may have an increase in new development and, consequently, demand for new properties in Sao Paulo,” Amary said.