Rio Still Brazil’s Most Expensive Real Estate Despite Declines

By Nelson Belen, Contributing Reporter

RIO DE JANEIRO, BRAZIL – According to the latest FipeZAP residential real estate sales index, which tracks prices in Brazil’s twenty biggest cities, Rio de Janeiro once again had the most expensive residential real estate sale prices in the country.

The Cidade Maravilhosa’s average residential sale price of R$9,918 per square meter was well ahead of the next most expensive city, São Paulo. Brazil’s commercial capital saw average prices in September of R$8,714 per square meter.

The good news for Paulista property owners is that São Paulo did actually see prices rise 0.21 percent from August to September. Rio, despite topping the survey in price per square meter, saw prices decline -0.57 percent in September, one of the largest drops in the survey.

“The trend continues this way as the prices were way too inflated over the years of the World Cup and Olympics — The decrease is slowly following its path in order for the prices to become more reasonable and reflect their true value,” explained Charlie Jonas from luxury real estate agency, Rio Exclusive.

“It is a good sign for us as for investors, especially for the foreign ones who see lower prices and interesting currency exchange rates,” said Jonas, adding, “Now is definitely a good time to invest!”

Within Rio, the upscale neighborhood of Leblon still maintains its position as the most expensive square meter in all of Brazil, with real estate sale prices clocking in at R$20,880 per square meter. Not too far behind was Ipanema at R$19,484, and Lagoa at R$17,728.

In São Paulo, apartments in Vila Nova Conceição in São Paulo’s Zona Sul (South Zone) had the most expensive prices, at R$16,670 per square meter. Vila Nova Conceição was followed by the neighborhood of Jardim Europa at R$15,715, and Jardim Paulistano, at R$15,365 per square meter.

Overall, across the twenty Brazilian cities surveyed in September, residential real estate sales prices continued its downward trajectory, albeit ever so slightly, registering a marginal decline of -0.07 percent.

The slight decline represents the seventh consecutive month of nominal decreases in Brazil’s residential real estate sector.

The largest declines in September were registered in Fortaleza (-0.82 percent), Rio de Janeiro (-0.57 percent) and Santos (-0.37 percent).

On the positive side, seven of the twenty cities surveyed in September showed increases, with the largest gains seen in Florianópolis (0.61 percent), Recife (0.40 percent) and Belo Horizonte (0.32 percent).

When measured against inflation, Florianópolis, Recife, Belo Horizonte, and São Paulo were all able to outpace Septembers’ expected inflation rate of 0.10 percent, as calculated by the IPCA/IBGE (National Consumer Price Index/Brazilian Institute of Geography and Statistics).

Spread out over the previous twelve months, eleven of the twenty cities that were surveyed showed nominal declines in residential sales prices, with the worst declines seen in Fortaleza (-4.04 percent), Rio de Janeiro (-3.58 percent) and Distrito Federal (-2.68 percent).

Of the cities that showed increases in the last twelve months, only two showed a higher variation than the accumulated rate of inflation of 2.48 percent: Belo Horizonte, which registered an increase of 5.00 percent for the period, and Florianópolis, which showed an increase of 3.36 percent.

The FipeZap Index monitors real estate sale prices across twenty Brazilian cities and is a monthly gauge of real estate prices. It is prepared jointly by the university research center, Fipe (Economic Research Institute Foundation) and the Brazilian online real estate platform, Zap Properties.