After an unusual 12 months, the Brazilian property market is set for a good 2015 characterised by marked increases in mortgage lending and greater sales activity. Government investment in the social housing programme, strong job creation and the Rio de Janeiro Olympics on the horizon are three of the main factors that will be driving the market next year.
The Brazilian Real Estate Federation (Fiabci) recently held a round table conference in Sao Paulo attended by property analysts and some of Brazil’s largest developers. All agreed that the combination of a late carnival (the country’s biggest holiday period), presidential elections and the FIFA World Cup had made 2014 an unusual year for property in Brazil.
The President of the Sao Paulo construction association (Secovi-SP) said the market in Brazil’s financial capital had generally been slow and new-build launches had fallen by 16 per cent throughout the year. However, the association has noticed a marked improvement in sales during November and December.
One of the Brazilian property market’s main indicators is the mortgage lending sector. The head of Abecip (the Brazilian mortgage association) Lazari Júnior reported that mortgage lending in Brazil has risen by 10 per cent this year with a similar rise expected in 2015. Abecip bases this prediction of the “relative comfort” of the mortgage sector sustained by the triple pillars of growing employment, increasing consumer confidence and low mortgage default.
For his part, the President of Abyara Brokers said that Brazil now has a balanced property market and because of this, his investment company is expecting a good year in 2015. Latest figures from the national property price index FipeZap would appear to back this up. In November, prices rose by 0.45 per cent bringing the year-on-year figure to 7.4 per cent. Cities in the south of Brazil performed less well than the national average, but those in north and northeast Brazil continue to outshine the rest of the country. Over the last 12 months, prices for property in Fortaleza have risen by 8.3 per cent.
Also predicting a good year for Brazilian property is Imoconnect, one of Brazil’s largest nationwide property networks. The company reported a 45 per cent increase in sales during Q3 this year. Government investment in the social housing programme (Minha Casa Minha Vida – one of the largest in the world), an increase in the minimum wage and the fact that the Rio de Janeiro Olympics are just 18 months away lead Imoconnect to expect even better results during 2015.