- Advertisement -

By Anna Fitzpatrick, Contributing Reporter

SÃO PAULO, BRAZIL – While the rest of the world’s housing market looks shaky, Brazil has been booming and new figures reveal that in São Paulo prices have risen by nearly twenty percent in the last year. A report published by the Global Property Guide last week shows a rise of 19.50 percent in advertised property prices during the year ending in the second quarter of 2011.

A view of São Paulo, Brazil, from a plane coming in to land at Congonhas airport, São Paulo, Brazil News
A view of São Paulo, Brazil, from a plane coming in to land at Congonhas Airport, photo by Roger Wollstadt/Flickr Creative Commons License.

According to the report, only thirteen countries of the 39 surveyed saw any house price increases by the end of the second quarter, with Brazil having the second largest reported house price rises. Other figures revealed that house prices in the U.S. fell 9.05 percent after inflation in the same time period.

The report attributes this growth to growing incomes and the emerging middle class. Brazil has recently enjoyed more political and economic stability and credit is easily available. Certainly the economy is growing, and although slowing recently, it is expected to continue despite problems globally.

It has been difficult to compare data available in Brazil to information about other South American cities due to the poor access of information. Matthew Montagu-Pollock, owner of Global Property Guide, believes that the figures from South America must be considered warily.

“As an indicator for the rest of the region, what is happening in Brazil should be treated carefully. Brazil is doing very well and statistics in the rest of the region are difficult to come by,” says Matthew.

With prices increasing in São Paulo it is not surprising that in other desirable post-codes across the country this will also be true. Real estate values in some parts of Rio were averaging a higher price per square meter than in São Paulo, so although the report focuses on São Paulo, the trend can be seen elsewhere across the country as well.

Property in both Rio and São Paulo has been attracting a great deal of international investment. Last year real estate company Judice & Araujo registered an increase of 150 percent in foreign investment in the Brazilian real estate market, especially when compared to real estate markets across the globe.

A trend that Matthew Montagu-Pollock highlighted works both ways, explaining: “[There are] Brazilians (along with other Latin Americans) investing in real estate in Miami, as falling property prices and a weak dollar make it a very attractive prospect.”

Critics worry that the Brazilian market is overheating and reports are emerging that sales are slowing, particularly in São Paulo but also in Porto Alegre and Belo Horizonte. According to the housing union SECOVI, between the first halves of 2010 and 2011 sales of new homes fell between 31.3 percent and 28 percent, though list prices increased.

People are starting to balk at the high prices, but still, the supply is limited in sought after neighborhoods. Eighty percent of properties on the market in São Paulo are sold within the first six months, showing that demand is still strong.

- Advertisement -
SHARE
Previous articleThe Hardest Part
Next articleA Visit to Centro Cultural Justiça Federal

Through the years we have had over a hundred freelance reporters and contributors writing for us, and we thank them all for their work.