By Nelson Belen, Contributing Reporter
RIO DE JANEIRO, BRAZIL – Despite the country’s lingering economic recession and unstable political climate, Brazil’s real estate market received some positive news this week showing that in the second quarter of 2018 new property listings and sales across the country have risen sharply, according to the Brazilian Chamber of Construction (CBIC).
Between April and July 2018, new units hitting the market across the country reached 25,483, an impressive 120 percent increase from the the first quarter of 2018, and a twenty percent increase over the same period in 2017.
With respect to sales, new unit sales during the April and July period of this year climbed to 29,951 units sold, an impressive 33 percent more than last year’s second quarter.
With sales outpacing new listings, the inventory of available units through June decreased by fourteen percent, or 124,715 available units.
“The available inventory is below even the sector’s ‘golden era,'” explained CBIC president José Carlos Martins. “The drop in inventory has occurred because sales have been higher than launches for several quarters now,” he added. “The launches have grown a lot, but they are still not enough to replenish sales.”
“In Rio, there is a greater interest from buyers for 2 and 3 bedrooms and also smaller apartments, with a single bedroom, but with a good location,” shared Frederic Cockenpot, expatriate and owner of luxury real estate firm, WhereInRio.
“It is possible to see a recovery of activity for high quality properties, probably due to the low amount of new properties opening in recent years and the decline in demand. In parallel, studios located near shopping mall and metro stations, without garage, are coveted by young people looking for service and mobility facilities.”
In addition, according to CBIC, the latest data shows that once a unit is listed it remains on the market an average of twelve months, a sharp reduction over the past two years. In 2017, new units remained on the market for an average of nineteen months. In 2016, the average time on the market for a new unit was 21 months.
Among the available units, nineteen percent are in the planning stage, 49 percent are under construction, and 32 percent are completed.
For Cockenpot, the low supply coupled with flexible financing indicates the demand for property will continue into the near future. “Some concrete data indicates that this is a good time for the purchase of a property. Both for those who want to invest in the sector and for those who are looking for a home.”
He added, “The fact that the Federal Savings Bank (Caixa Econômica Federal) is financing up to seventy percent of the real estate value is another source of stimulus for the heating of the business. This dynamic pulls other banks, low and stable inflation and signs of GDP growth increase buyer confidence.”