2021 records mean good prospects for Brazilian real estate in 2022

2021 records mean good prospects for Brazilian real estate in 2022

After setting several records last year, Brazilian real estate is looking forward to a solid 2022, particularly in the second home market. With the sector enjoying rigorous control and improved legislation, the new and outgoing Presidents of ABECIP believe that this year will be favourable for property in Brazil. 

Consolidation in 2022

José Rocha, the new President of the Brazilian Mortgage Association, ABECIP, outlined his forecast for Brazilian real estate this year in a recent interview. He predicts stabilisation in the market as it settles into higher interest rates.

Rocha points out, however, that there’s no sign of demand diminishing. On the contrary, he believes that it’s very likely that new launches will continue at the same rate in 2022. “This should allow this year to be significant for property investment,” he said. 

More rigorous protection 

According to Rocha, the mechanisms created during the 2014-15 recession have strengthened legal protection for buyers of Brazilian real estate. ABECIP has emphasised ensuring appropriation legislation is in place for mortgage loans. 

“We assisted in creating systems to monitor launches and sales to improve inventory controls,” he said. These systems also help avoid an imbalance between supply and demand. As a result, “the market is now more secure for off-plan buyers”. 

Principal advances in mortgage loans

For her part, Cristiane Portela, the outgoing President of ABECIP, highlighted several aspects of mortgage lending over the last two years in Brazil. 

Record loan values in 2020 and 2021 

The R$123.9 billion in 2020 was the highest since 2013 and the R$200 billion in 2021 took the record ever further. She points out that the figures for 2020 and 2021 are both during the pandemic. 

Digital lending processes

The extended use of digital applications has greatly facilitated mortgage lending in Brazil and by extension, boosted the real estate market. In the last two years, buyers have taken out loans for 1.16 million units compared to 526,300 between 2018 and 2020. 

Records in Brazilian real estate in 2021

Portela attributes last year’s exception figures to buyers and the construction industry. She specifically highlights the following aspects of the real estate market last year: 

·         Lack of housing in Brazil. 

·         Low interest rates.

·         Relatively attractive property prices.

·         Great appreciation of the home during the pandemic. 

Brazilian property market in 2022

Portela says she looks forward to a sector with strong growth this year and in the immediate future. She bases her predictions on two factors: the massive housing shortage, aggravated by the addition of 1.5 million new households every year; and the increase in housing transactions. 

As countries develop and become more affluent, the number of property sales increases as the population upgrades its housing. The second home market also grows exponentially. Transactions rise, according to Portela, even when population growth is low, as analysts predict for Brazil over the next few years.

(Source: ABECIP)