Real Estate in Brazil Registers Fall in Real Prices 2015

By Lisa Flueckiger, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Purchase real estate prices all over Brazil have fallen a combined 3.47 percent in real prices the first months of 2015 according to the Fipe-Zap index. The index collected real estate prices in twenty Brazilian cities and measured them against inflation, registering monthly price rises below inflation for the sixth time in a row.

In April of 2015 real estate prices have risen by 0.39 percent in comparison to March 2015 and by 5.25 percent in comparison to April of 2014. Yet, prices have stayed below inflation for the fourth consecutive time in the annual comparison.

Overall, the Fipe-Zap price index rose by 1.08 percent in 2015 so far, while inflation is estimated to have been around 4.55 percent in that period. Exact inflation measures for the first four months of 2015 are expected to be released by the Brazilian Statistics Bureau on Friday.

In the Southeast of Brazil, Rio was the city with the lowest price variation registered with an increase of 0.68 percent in the four months of 2015. In comparison to 2014, prices have risen by 4.07 percent, significantly less than in Belo Horizonte (8.09 percent) and São Paulo (6.37 percent) and the Brazilian average of 5.25 percent. In Niterói, Brasília and Curitiba prices even fell.

“In Rio, prices rose less than in the other two cities [Belo Horizonte and São Paulo]. On the other hand, this is natural because it was where we had the highest rise in prices between 2010 and 2012, so this slowdown is ‘returning’ an increase that was particular to the city,” economist Bruno Oliva from Fipe told O Globo.

Nevertheless, Rio de Janeiro remains the most expensive city to live in with an average purchase square meter price of R$10,653, followed by São Paulo with R$8,570. The Brazilian average stands at R$7,590.

Yet, Oliva expects the slowdown in price rises to continue throughout the year and even into next year, with 2015 ending with rates well below inflation.