Study Shows New Property Sales Slump 58 Percent in São Paulo between February and April

SÃO PAULO, BRAZIL – In an atypical year, considering the coronavirus pandemic, sales of new properties costing up to R$ 400,000 dropped 37 percent in São Paulo from February to April of this year, according to a survey conducted with 90 developers in the state by the digital real estate platform AoCubo.

Considering new properties costing more than R$ 400,000, the drop in sales over the same period mentioned was even greater: 58 percent.

According to the Brazilian Association of Real Estate Developers, the market expected exponential growth this year, due to the drop in interest rates on real estate credit and, mainly, the basic SELIC Rate, which boosts demand for developments when it is low.

“The buying and selling trend in any sector dropped by a considerable percentage during the quarantine. Among these sectors, one of the most impacted seems to be the real estate market. Although everyone expected a better year in the segment, the projected growth has become unfeasible due to the coronavirus,” explains Ronnie Sang, AoCubo’s founder and CEO.

According to Sang, developers had a large volume of launches planned for the post-Carnaval period – but the pandemic placed the plans on hold. “Despite the declines and this drop in expectations, transactions are happening, the market has not stopped. The crisis opens up opportunities and we are confident that the market will react quickly when the quarantine effectively ends,” he considers.

Thais Cancian, co-founder and COO of AoCubo, explains that the study was in line with the company’s findings. “More expensive properties saw a higher drop, while those with a lower price had a lower reduction in sales,” she says.

New rental properties

The study also analyzes the sales of properties considered “investor profile”, those with up to 70 square meters, regardless of price. For this sample, the drop in sales between February and April was 48 percent.

Cancian believes that if on the one hand the trend is for people to remain at home more and look for larger environments to live in, on the other hand their purchasing power may not increase sufficiently for them to effect that purchase. “Smaller properties will still have market space, because the price per square meter shouldn’t decrease,” he says.

Rebound

According to the executive, the new real estate sector should start to pick up from the start of the second semester. “In August, we will return to levels very close to the pre-pandemic scenario. Naturally, those who lost their jobs will not be able to buy, but the people who kept their jobs will not give up their dream of their own homes. Moreover, developers, despite not lowering the price, are easing payment conditions considerably,” says Cancian.

Sang says that since the market has not completely paralyzed, this upswing may occur faster than expected. “The market is still operating. That’s why we hope the rebound won’t take as long. The transaction volume is low, but it is there and the housing deficit in Brazil is still great. That’s why we are expecting a positive rebound,” says the CEO.

Source: InfoMoney