The housing market in Brazil is still healthy, benefiting from surging property demand and improving construction activity. In the first quarter of this year, the country’s FIPEZAP house price index increased by 5.54% on an annual basis, following y-o-y increases of 5.13% in Q4 2023, 5.29% in Q3, 5.72% in Q2, and 5.66% in Q1, according to figures released by Fundação Instituto de Pesquisas Econômicas (FIPE).
When adjusted for inflation, nationwide house prices increased by 0.99% over the period under review. On a quarterly basis, house prices across the Latin American country were up by 1.5% in the first quarter of this year, but down slightly by 0.47% in real terms.
The real estate market in Brazil is expected to reach a value of US$8.05tn in 2024, according to Statista. Within the market, Residential Real Estate holds the dominant position with a projected market volume of US$6.34tn in the same year. It is anticipated that the market will experience an annual growth rate of 1.34% from 2024 to 2028, resulting in a market volume of US$8.49tn by 2028, Statista analysts said.
Falling interest rates and cheaper mortgages will be the headlines for Brazil’s property market in 2024. The Brazilian Central Bank lowered its key Selic rate by 25 basis points to 10.5% in its May meeting, in line with expectations.
“Many predict the Selic to fall to 9% by the end of the year, a measure that will stimulate the real estate market in two ways. Firstly, cheaper mortgage loans will encourage would-be homeowners to enter the market. Secondly, more investors will enter the property market in search of assets that offer higher returns than interest rates” Bric Group, a globally recognized international property investment specialist and developer said.
Furthermore, Brazil’s federal government resumed last year its Minha Casa, Minha Vida (or My Home, My Life) affordable housing program – the largest of its kind in Brazil. Managed by the Ministry of Cities, Minha Casa, Minha Vida offers subsidies and interest rates below the market to facilitate the acquisition of popular housing and housing developments in the city or in the countryside up to a certain amount. The resumption of Minha Casa, Minha Vida will improve the statistical results concerning the housing deficit in Brazil, influence the country’s economy and also amplify opportunities for developers and investors to tap into the growing demand for housing solutions.
