Residential Property Sales Prices Rise for Second Consecutive Month

RIO DE JANEIRO, BRAZIL  – The sale price of residential real estate in 50 municipalities increased for the second consecutive month. In October, the FipeZap Index rose by 0.43 percent, after posting a 0.53 percent increase in September. The data are from Fipezap Index, a study conducted by the Institute of Economic Research Foundation (FIPE).

Despite the increase, the index remained below projections, taking as a parameter the National Broad Consumer Price Index (IPCA), as measured by the Brazilian Institute of Geography and Statistics (IBGE). A 0.79 percent variation had been expected.

“Once the expected variation in consumer prices is confirmed, the average price of residential property sales will close this month with a drop of 0.36 percent, in real terms,” notes the Zap Group, which publishes the FipeZap Index. The IPCA projection is included in the Focus Bulletin, prepared by the Central Bank.

Still according to the company, all Brazilian capital cities monitored by the FipeZap Index have shown an increase in the average price of residential property sales last month: Recife (1,68 percent), Manaus (1,22 percent), Vitoria (1,16 percent), Curitiba (1,09 percent), Campo Grande (1,06 percent), João Pessoa (0,90 percent) and Goiânia (0,80 percent). In São Paulo, the city with the highest weight in the FipeZap Index calculation, the nominal variation recorded in October stood at 0.25 percent. In Rio de Janeiro, another very important reference, there was an increase of 0.39 percent.

Among residential properties, the average sales price was of R$7,424 per square meter in October. The capital with the highest price was Rio de Janeiro with R$9,383/m², followed by São Paulo (R$9,265/m²) and Brasília (R$7,927/m²). At the opposite end are Campo Grande (R$4,342/m²), Goiânia (R$4,403/m²) and João Pessoa (R$4,431/m²).

In the year-to-date, there is a nominal high of 2.75 percent in the FipeZap Index, and the expected variation for the IPCA is of 2.14 percent. When comparing the accumulated variation of the FipeZap Index and the expected inflation, the average sale price of residential properties is expected to close the period with a real increase of 0.59 percent.

Throughout the year, all the capital cities monitored recorded an increase, with the exception of Recife, where the average residential sales price accumulated a drop of 2.15 percent. Brasília reported the most significant growth (8.33 percent), followed by Curitiba (6.35 percent), Florianópolis (5.27 percent), Campo Grande (5.07 percent), Maceió (4.85 percent) and Manaus (4.67 percent). In São Paulo and Rio de Janeiro, the average residential segment sales prices closed the period with cumulative highs of 3.07 and 1.02 percent, respectively.

Over the past 12 months, the Residential Sales FipeZap Index presented a nominal increase of 2.72 percent. Compared to the accumulated inflation over the last 12 months (+3.85 percent), the real drop stood at 1.08 percent.

Among the capital cities monitored by the FipeZap Index, Brasília posted the highest nominal increase (7.18 percent). Next are Curitiba (6.9 percent), Florianópolis (5.85 percent), Vitória (5.29 percent), Campo Grande (4.95 percent), Belo Horizonte (4.32 percent), Manaus (4.21 percent), São Paulo (3.59 percent) and Rio de Janeiro (0.60 percent). Among those reporting declines are Fortaleza (-3.73 percent) and Recife (-1.65 percent).

Source: Agência Brasil