Mortgage lending soared in the year to February prompting real estate analysts to confirm the upward trend in the Brazilian property market. Not only have loans skyrocketed in the last 12 months, mortgages have also gone up significantly so far this year. Ceará in Northeast Brazil is also experiencing a sharp rise in loans to buy or build property.
Mortgage lending up in year
The latest figures released by the Brazilian Mortgage Association (ABECIP) point to a significant uptick in the number of mortgages taken out over the last year. In February loans went up by 37.8% compared to the same month in 2018. The figures clearly indicate that the Brazilian property market is heating up after a relatively quiet 2018.
In terms of the number of mortgages, Brazilian banks approved 19,400 loans for properties in February this year. This translates to a 48% rise on the same month last year. In the 12 months to February, Brazilians took out mortgages to a loan value of R$59.96 billion.
Strong start for Brazilian property market
The ABECIP figures for February would seem to indicate a trend for 2019. January was also a strong month in terms of mortgage lending. In the first two months of this year, some 39,300 loans were approved for properties in Brazil. This represents an increase of 36% on 2018.
The reasons for the surge in mortgage lending include the new political climate and a shift in the economy, which grew by 1.1% in 2018. Experts also point to more optimism within the Brazilian property market itself as well as a reduction in taxes on new mortgages in Brazil.
Loans up in Ceará
In Ceará in Northeast Brazil, mortgage lending has also risen considerably this year compared to 2018. In the first two months of the year, the number of loans for property purchase or construction went up by 13.8. Their total value increased by 25.9% to R$196 million in the year.
According to André Montenegro, President of the Ceará Civil Construction Industry Union (Sinduscon-CE), the rise in mortgages confirms the upward trend in the property market in Ceará. “We expect to see this continue throughout the year,” he said.
The President of the Ceará Real Estate Agents Association (CRECI-CE) echoed this sentiment. “The market improvement is confirmed by the number of purchases currently taking place in the state,” said Tiberio Benevides.
Supply drops in Ceará
The increase in sales has reduced the supply of new property in Ceará considerably over the last year. According to Sinduscon-CE figures, at the end of 2018, there were 7,500 new builds on the market in the state. This is a 37.5% decrease on 2017 and clearly indicates the interest in Ceará property.
(Sources: ABECIP, Diario do Nordeste)