By Karen Shishiptorova, Contributing Reporter
In addition, the heavy paperwork and bureaucracy inherent to Brazilian home loans is being lessened with the birth of mortgage brokers, a newcomer to the market.
With an extended credit line, Cariocas have gone house hunting. According to an unprecedented study by Secovi-Rio – a nationwide branched housing syndicate – the result is a 100 percent average increase in Rio de Janeiro real estate prices within the last eight years.
The study compared advertised prices of houses and apartments between October 2000 and October 2008. Most properties doubled in price. The highest increase registered was in Botafogo, hitting an impressive 128.65%, while the lowest was in Barra da Tijuca at a respectable 51.84%.
Secovi’s Vice President Mr. Leonardo Schneider, stated that, “In Zona Sul, Botafogo is a neighborhood which still has room to grow. That way, the new buildings contribute to the area’s increase in value.” He also added, “this is solidifying Botafogo as an option for middle-class families, especially due to its proximity to Ipanema, Leblon and Centro – not to mention the vast commerce and services available there.”
Averaging around 122 square meters, three bedrooms today cost R$493,200, with approximately R$588 in monthly condominium fees. Rentals – around R$1,815 – went up 59.7% in eight years.
After Botafogo, comes Méier, in the North zone, with the average three-bedroom house priced around R$175,500 and with a 128.04% increase noted between 2000 and 2008. Rentals however, around R$729, had little value increase at only 19.13% in eight years, with an average of R$369.
In Copacabana, where the average three-bedroom apartment measures about 142 square meters, the increase was 104.3%, now costing around R$548,800. According to the study, these properties had a remarkable rental increase at 137.1%. Currently, such rentals are going for R$2,557, while the average monthly condominium fee is R$563.
Mr. Schneider offers, “Copacabana is a classic neighborhood, multifaceted, with very affordable prices within Zona Sul. It’s the most popular choice for people outside of Rio, so it’s in constant demand, especially for seasonal rentals.”
Despite its position as Rio’s most well-heeled neighborhood, Leblon registered an increase of just 94.2% in eight years, with three bedrooms today costing around R$911,300. Properties with an average of 130 square meters are being rented for R$5,250, up 64.6% in eight years.
Mr. Schneider explains, “Leblon and Ipanema had already experienced great value increase since the 80s and 90s and although still rising, prices in both neighborhoods are hitting a plateau, which explains the slower growth.”
Barra da Tijuca, in the West Zone, revealed the lowest increase for three bedrooms with 51.84%. Units of 120 square meters are being negotiated at R$478,000 and rented for R$3,121, up 69% within eight years. Monthly condominium fees, however, are the highest at R$828, due to the comprehensive services and leisure usually offered within Barra complexes.
Barra ranks first in new housing development where offer exceeds demand, a pattern seen in the last two decades. There is adequate space for new complexes due to great availability of land. Barra is a less crowded neighborhood when compared to areas in Zona Sul, and resembles a mini-Miami with an abundance of small shopping centers with open parking lots.
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