Residential Real Estate Sales Prices in Rio de Janeiro Registered 1.6% Rise
RIO DE JANEIRO, BRAZIL – With a booming real estate market, Rio de Janeiro showed an increase in average residential real estate sales figures. Despite the increase, Rio recorded the lowest rise in Brazil. Nevertheless, the Marvelous City retained the country’s most expensive square meter.
According to the FipeZap Index of Advertised Real Estate Prices, developed by the Economic Research Institute Foundation (FIPE) and the ZAP Group, the rise in the capital of the state of Rio de Janeiro reached 1.6%.
The indicator follows the variation in the average price per square meter of finished houses and apartments in 50 Brazilian cities, based on internet advertising. According to experts, the rise of less than 2% was followed by a large increase in the rate of sales. In other words, prices rose little, but the number of sales increased.
Privilégio Imóveis’ CEO João Paulo Mallet says that he has noticed this rise in prices and, according to him, some factors have contributed to this appreciation:
“We observed a market appreciation trend and, in my opinion, the factors that prompted this market rise are the sales backlog after the pandemic, producing a suppressed demand; Brazil is experiencing a tremendous housing deficit, which prompts a more active market activity. In addition, the market has very low interest rates and the rising dollar and euro have made investments very attractive,” he said.
Moreover, Mallet mentioned some other factors which have contributed to this rise in residential prices. According to him, with social isolation, people spent more time at home and learned to value their homes more. As a result, there was a social demand for larger areas. In addition, the reduction in the SELIC rate rendered real estate investment even more attractive compared to bank investments. Not to mention the drop in real estate financing rates.
Sérgio Castro Imóveis’ manager Lucy Dobbin pointed out that the real estate market has never stopped being a safe investment and now it has become much more profitable than banking investments, thereby helping to reheat the sector.
“Historically, real interest rates in Brazil have always been very high and the yield from risk-free investments, although lower than risky ones, was guaranteed. This is no longer the case. There is no profit in risk-free investments, except for real estate, which still offers not only security but also the opportunity for profitability through rental. Nowadays, real estate is the only investment not only appreciating in value but also yielding profits. Another very important factor to be considered is the increased need of many owners to capitalize or pay off debts last year and this drives the market and encourages buyers.”
Mallet further said that he believes that the trend for 2021 is for the real estate market to continue rebounding: “The trend is for market rebound. I don’t believe that there will be a price boom, because the economy is not heated, but I believe in a correction in prices and there will be an increase,” said Mallet. “It is the last opportunity to go shopping with old prices,” complements Dobbin.
According to both, the best option is to invest in properties for renovation. Often enjoying the same location as new properties sold at much higher prices, here would lie the best opportunities.
Despite the 1.6% increase, Rio registered the lowest rise in Brazil. Nevertheless, the Marvelous City maintained the country’s most expensive per square meter, in addition to being the fifth most expensive city for buying residential property in Latin America.
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