The Brazilian presidential elections in early autumn last year brought an end to uncertainty in the country. As a result, most sectors of the economy saw a surge of optimism and activity. The Brazil property market was no exception with a rush of new development in Q4. The trend looks set to continue as the largest developers in Brazil announce big projects for this year, particularly aimed at the upper middle-class market.
With the definition of the political scenario in Q4, the Brazilian economy shifted up a gear. Reflecting this rise in confidence was intense activity in the property development sector. The Brazilian Mortgage Association (ABECIP) describes the quarterly results as “surprising” – in the last three months of 2018, the number of launches went up by 55.7% and their value by 39.5% to reach a total of R$6.69 billion.
All nine of the largest development companies in Brazil reported an increase in launches between October and December. Between them, Cyrela, Direccional Ingeniería, Even Constructora e Incorporadora, EZTec, Gafisa, MRV Ingeniería, RNI Negocios Inmobiliarios, Tenda and Trisul brought R$16.9 billion’s worth of new development onto the Brazilian property market. The figure represents a 27.5% increase on the same quarter in 2017.
Sales for Q4 also followed the upward trend in the Brazil property market. The nine companies sold property to the tune of R$4.44 billion in the last quarter of the year, an increase of 10.8% on 2017. Sales for 2018 as a whole also rose and reached a total of R$15.19 billion, up 9%. EZTec reported that 2018 was its best year for sales since 2014.
Sao Paulo leading market
Developers reported a rise in demand from the upper middle and upper classes. This trend in the Brazil property market was particularly noticeable in the country’s financial capital, Sao Paulo. The city has the largest property market in Brazil and is currently expanding fast.
Demand for land in Sao Paulo is high, mainly in areas close to public transport connections and amenities. Cyrela reportedly bought more land in Sao Paulo in 2018 than the total of its land purchases for the previous three years. “The market is heating up,” said one of the company representatives, quoted in the ABECIP article, “with strong interest from companies from outside Sao Paulo.”
Brazil property market set for good 2019
The increase in confidence in Brazilian real estate is particularly strong among the higher echelons of society. Developers report that demand has surged among the upper middle classes and this trend is expected to continue during 2019.
The largest developer in Brazil, MRV, has already announced that it will be launching more developments in 2019 than in 2018. The company has based its plans on the good prospects for the Brazil property market this year. Cyrela (the second largest) also plans to increase its launches throughout 2019.