By Jay Forte, Contributing Reporter
RIO DE JANEIRO, BRAZIL – According to the FipeZap Index, the decline in Rio’s residential real estate value was 4.45 percent in 2017 (before factoring in inflation), the largest drop in the country. The neighboring city of Niterói was the second largest drop, by 3.43 percent.
At the height of the real estate boom, prices rose more than forty percent in Rio, in the accumulated result in twelve months, in mid-2011. Despite the fall in price since, Rio remains the city with the most expensive square meter in the country, worth R$9,811.
The most valued Rio neighborhoods were Leblon, where the sale price reaches R$20,757 per square meter – more than twice the average value in the Rio market – and Ipanema, at R$19,378 per square meter.
Expatriate and principle WhereInRio Luxury Rentals and Sales, Frederic Cockenpot, shared last month that the declines seen in Rio may actually be greater than seen in the Index. “The FipeZap doesn’t show the full picture,” said Cockenpot to The Rio Times.
“The index is based on the offering price and not the real price owner and buyer agree to close a deal. The drop in real estate in Rio de Janeiro is bigger than that as it’s common today to have a negotiation up to 10 to 15 percent down.”
In 2017, thirteen of the twenty cities surveyed saw the price of residential real estate for sale fall. In Brazil, the average price of residential real estate for sale fell by 0.53 percent last year, the first time the indicator dropped nominally in a full year since the series began to be determined ten years ago.
If inflation is accounted for – considering the Focus Bulletin (IPCA/IBGE) estimate, from the Central Bank, from 2.78 percent to 2017 – the real decrease in real estate prices was 3.23 percent across Brazil. The average value of the square meter closed at R$7,631 in the country.
As inflation fell, this real drop in the country’s figures was below that recorded in 2016, when the IPCA, measured by IBGE, was 6.29 percent. With this, in 2016, although the FipeZap index advanced 0.57 percent, prices had a real decrease of 5.38 percent.
Behind Rio, São Paulo is the second most expensive square meter in the country, with R$8,745. Next comes Federal District, with R$8,238, and Niterói, with R$7,225.