Professionals just can’t get enough of property in Fortaleza. Sales to those at the highest end of the salary scale account for almost a third so far this year. This together with something of a boom in the market makes Fortaleza one of the hot spots for property in Northeast Brazil.
Who’s buying property in Fortaleza
According to the October report for property in the city published by Lopes Immobilis, over 30% of all sales between January and October were to professionals. Made up of entrepreneurs, doctors and business managers, this group have bought the lion’s share of property so far this year.
Entrepreneurs are the largest single group of buyers. They make up 14% of the market. Business managers and doctors account for 8.4% and 7.7% respectively. Civil servants make up the fourth largest group with a 6.9% share of the market.
Busy market conditions
The Fortaleza property market has had a buoyant year with particularly strong sales since the summer. Total sales rose by 26% in September, heralding the start of the busy autumn. Between January and October, nearly 1,750 apartments were sold in the city, 8% more than the same period last year. October saw 146 units sold, up 4% on last year.
Total values have also risen. In the first ten months of this year, sales of property in Fortaleza totalled R$1.4 billion, up a massive 32% on 2016. Values rose by 8% in October alone.
In October, there were 6,868 available units on the market in Fortaleza. Apartments make up most of the supply – over 70% – with properties classed as second homes and single family homes accounting for a very small percentage.
Meireles continued to rank as the most expensive area for property in Fortaleza with an average square metre price of R$10,671. Aldeota, the next priciest, had an average price of R$8,745.
Low interest rates moving market
One of the fundamental reasons behind the buoyant market conditions in Fortaleza lies in lower interest rates. In October, the Bank of Brazil dropped the SELIC base interest rate to 7.5%, just 0.5% short of the lowest ever. Analysts expect further benchmark reductions this year and forecast the SELIC to stand at 7% by the end of the year. This would be a historic low.
While mortgage interest rates remain ahead of the SELIC, they have fallen considerably this year. Most banks are currently offering around 9 to 10%, opening up the property market to more buyers.
This certainly appears to be the case with property in Fortaleza, particularly among those with most purchasing power. Consumer confidence is also contributing to a stronger market. The latest government survey for October showed that the index had risen 1.4% to reach 83.7, the highest since March and 3.8% more than a year ago.
“Mortgage interest rates for property in Fortaleza have fallen and this is a main factor behind the rebirth of the market,” said Emanuel Capistrano, president of the Ceará Construction Cooperative (Coopercon-CE in Brazilian), quoted in O Povo newspaper. “But it’s not only interest rates; market sentiment believes that the worst has passed.” The Fortaleza property market looks well set for 2018.
(Source: O Povo)