The property market in Ceará in Northeast Brazil has always followed a slightly different track to the rest of Brazil. Property in Fortaleza, the capital, grew faster than the majority of Brazilian cities prior to 2016 and this year, property prices have continued to grow. Local analysts agree that the forecast for Ceará property market in 2017 looks bright with more sales, growth in the high-end sector and higher rents.
General Tendencies in the Ceará Property Market in 2017
The president of the Ceará construction industry (Sinduscon-CE), André Montenegro points to a year of higher lending for mortgages in Brazil and increased sales at the start of next year. In an interview in the local O Povo newspaper, he also forecast there will be more launches of new developments in Ceará in the second half of the year once developers have sold off their existing stock.
Sergio Porto, President of the Ceará Housing Union (SECOVI-CE), reiterates this expectation, although he believes that new launches may hit the market earlier than July 2017. The state real estate agent association (CRECI-CE) forecasts a return of buyers en masse during the first quarter.
The association bases this prediction on the fact that many potential Brazilian property buyers have spent this year waiting to see how the country’s political situation resolves itself. Since the new government took power in the summer, economic confidence has returned to Brazil and with it, a surge in interest in buying property.
The President of CRECI-CE, Apollo Scherer, predicts an increase in demand for properties in Ceará during next year. In O Povo, he stressed that estate agents in the state had already detected a rise in demand during November.
The High-end Ceará Property Market in 2017
For Flavio Pinto, President of the Ceará Estate Agents’ Network (RIC), there is plenty of room for expansion in the luxury sector of the Ceará property market. He states that “there is currently more demand than supply in Fortaleza”.
The limited supply of properties at the high-end of the market, particularly those with at least three bedrooms and quality fittings, was evident at a property fair held in Fortaleza in late October. Relatively few of the homes on sale at the fair ticked all the boxes for Class A buyers. According to Scopa Engenharia, a company specialised in developing luxury properties in Ceará, Class A has been relatively unaffected by the economic crisis.
Higher Prices for Ceará Property in 2017
Another expectation for the Ceará property market in 2017 is higher prices. Fortaleza has maintained its upward tendency in prices throughout 2016 unlike some Brazilian cities. In the year to November, property in Fortaleza went up by 1.43 per cent, while homes in Rio de Janeiro saw their prices fall by 2.20 per cent.
Given the demand for property in Fortaleza and the general expectation of increased interest over the next 12 months, 2017 looks set to see further price increases in the state.
The Rental Property Market in Ceará in 2017
Like the rest of Brazil, the market for rental properties in Ceará has experienced huge expansion over the last decade. In the Ceará, the number of households living in rental accommodation rose from 14.5 per cent in 2005 to 17.3 per cent in 2015 (latest data available).
Rental rates have seen spectacular increases since 2008. According to the Brazilian Statistical Agency (IBGE), between February 2008 and December last year rentals went up by 106.92 per cent. This hike in rental prices has affected affordability levels that now average 32 per cent of a salary in Brazil. In Fortaleza, this percentage is slightly higher (33.6 per cent), reflecting the pent-up demand for rental accommodation in the city.
Given the huge demand for new homes among Brazilians – the country still maintains a massive deficit in accommodation – it follows that the need for rental properties will continue to rise. Forecasts point to higher rental rates across the board including Ceará.
“These predictions paint a very positive picture of the Ceará property market in 2017,” says Dies Poppeliers, Managing Director of BRIC Group. “We have seen a marked increase in the number of Brazilians interested in buying property at The Coral this year, reflecting the demand for high-end homes in the region. We fully expect to see this grow exponentially.”
An investment company specialising in global real estate opportunities, BRIC Group is currently developing The Coral resort in Northeast Brazil, a luxury beachfront resort. BRIC Group also offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.
(Sources: O Povo, IBGE)