Luxury property in Brazil remains untouched by the economic crisis although preferred locations have shifted. Northeast Brazil and Southeast Brazil now dominate searches with high-end property in Fortaleza the most sought-after.
One of the leading online portals for property in Brazil, has released figures for searches for properties costing in excess of R$1 million during Q3 this year. The portal finds that the demand for luxury homes generally has risen considerably between September 2014 and September this year. Specifically, sales of properties with a price tag of over R$1 million have gone up by 32 per cent year-on-year.
Fortaleza most sought-after
In terms of favoured locations for these luxury properties, Fortaleza (the capital of Ceará in Northeast Brazil) has seen a massive hike in number of searches. The number of potential buyers of this type of real estate in Fortaleza rose by 92 per cent in the year to September. This figures lies well ahead of the next two most sought-after locations, Curitiba and Porto Alegre – both in Southeast Brazil – where searches increased by 70 and 67 per cent respectively.
Property portals highlight the fact that the luxury property market in Brazil is growing, particularly in locations where investors can buy quality homes for R$1 million. “Historically high-standing property transactions are less dependent on mortgage financing,” said Lucas Vargas, Vice-President of a leading property portal, “buyers tend to use their own funds to pay most of the price”. This explains the consolidation of the luxury market.
The property portal pointed out that in cities such as Rio de Janeiro and Sao Paulo where square metre prices are well above the national average, it’s impossible to buy luxury properties for just R$1 million.
In Fortaleza, on the other hand, property is considerably more affordable and priced at below the Brazilian median. In September, the average square metre price in the Ceará capital reached R$5,746, nearly 25 per cent below the cost in Brazil generally. Rio de Janeiro tops the national ranking with an average of R$10,538, although this figures masks much higher prices in prime areas of the city such as Ipanema and Lebron where properties cost over R$20,000 per square metre.
Good September for Fortaleza property
The latest FIPEZAP, the monthly price index for Brazilian properties, confirmed the popularity of Fortaleza among buyers. The September index found that property in Fortaleza has gone up by 4.68 per cent so far this year, the third highest rise in Brazil, behind just Florianopolis and Vitoria. In year-on-year terms, Fortaleza registered a rise of 5.89 per cent, the fourth highest in the country.
These figures contrast markedly with the tendency in Brazil as a whole. In September, prices rose country wide by just 0.12 per cent and in 8 out of the 20 cities included in the FIPEZAP index, property prices went down. The average price for property in Brazil was R$7,601
Sources: Vivareal, FIPEZAP