2021 is best year ever for new-build real estate in Brazil

2021 is best year ever for new-build real estate in Brazil

This year, pent-up demand and low interest rates have combined to make it the best ever for new-build real estate in Brazil. Both launches and sales of new property have skyrocketed since January in 162 cities in the country. Furthermore, analysts believe that 2022 will see a similar tren.

Launches and sales soar in first three quarters

A recent survey of new-build real estate in 162 cities in Brazil has confirmed that 2021 has been a busy year for developers. According to the author of the survey, the Brazilian Chamber of the Construction Industry (CBIC), launches and sales have soared this year. 

Between January and September, new property launches went up by 37.6% across the country to total over 171,000 units. Sales also increased significantly compared to the same period in 2020 and saw a 22.5% rise. In Q3 alone, launches rose by 13.6%. 

CBIC expects to see an increase of 15.9% in launches and a 10.7% uptick in sales of new builds by the end of the year. 

Supply stable 

Inventory levels indicate the health of a property market and in Brazil, there’s still plenty of room for demand to grow. According to the CBIC, at the end of September, the supply of new-build real estate in Brazil stood at 9.5 months. 

Room for price growth 

Prices for new property in Brazil have remained stable this year and buyers have made the most of the situation. Analysts believe, however, there is plenty of room for prices to increase within the market. 

“There’s still a very wide margin for price growth,” said Jose Carlos Martins, President of CBIC. However, the increase in the prices of building materials, a worldwide phenomenon, is expected to affect new-build property values in Brazil. 

Balance for next year 

The CBIC believes that the Brazilian property market will remain stable regarding launches and sales of new builds in 2022. “Independently of the scenario, I see neither decreases or growth in new development next year,” said Celso Petrucci, Vice-President of the organization. 

Mortgage lending continues to boom in Brazil 

Home loans continue to set records this year as low interest rates and high demand drive the mortgage market. In the ten months to October, the value of property financed in Brazil reached R$171.85 billion, an increase of 85.4% on the same period in 2020. 

According to the latest figures from the Brazilian Mortgage Association, ABECIP, homebuyers took out loans worth R$203.15 in the year, an increase of 86.2%. In October, 71,100 units were bought with a mortgage, up 56.2% on the same month in 2020.

(Sources: CBIC, ABECIP)