Brazilian real estate has generally experienced a strong year with robust demand across the country’s main markets. But one sector has performed exceptionally well in 2021 and exceeded expectations. Luxury property in Brazil has registered double-digit increases in sales and launches in both Sao Paulo and Rio de Janeiro. Furthermore, analysts expect this trend to continue on the back of solid demand.
High-end property in demand
One of the reasons that luxury property in Brazil has experienced such strong growth in 2021 lies in the significant rise in demand. Affluent Brazilian families want more space, quality and comfort in their homes and as a result, interest in the high-end sector has risen considerably this year.
The country’s two main luxury markets, Sao Paulo and Rio de Janeiro, have both seen a large uptick in demand for properties worth over R$2 million.
“Many people reconsidered their living values,” said Claudio Hermolin, President of the Sao Paulo Civil Construction Association (SECOVI-SP). “As they looked for a better quality of life, demand increased for larger homes at the higher end of the market.
Hermolin said that the first quarter this year was the best for luxury property in Brazil since 2015, with the sector experiencing significant recovery over the last year.
Sales of luxury property in Brazil soar
According to statistics from DataZap, luxury apartments have been the preference among affluent buyers in both of Brazil’s largest cities. In Sao Paulo, sales of apartments priced over R$2 million went up by 3.2% in the year to June. In Rio de Janeiro, the increase was even higher with transactions rising by 10%.
In the lower price echelon (over R$1.5 million), the figures were even more impressive. The Brazilian Association of Developers (ABRAINC) reported that sales of this type of property rose by 43% in Sao Paulo between January and September. SECOVI-RJ said that sales in Rio increased by 72% over the same period.
Launches also on the rise
In tandem with solid sales was the giant leap in the number of launches of luxury property in Brazil. In Sao Paulo alone, they went up by 232% in the first nine months of this year. In Rio de Janeiro, the increase was in the region of 35%.
According to the President of ABRAINC, Luiz Franca, the figures underline the performance of luxury property in Brazil and the strong outcome for the rest of the year. “The high-end, luxury and super-luxury sectors stand out for their results,” he said, “and show that buyers see them as more beneficial than traditional investment products.”
Steady price rises for property in Sao Paulo and Rio de Janeiro
The latest FipeZap price index for Brazilian real estate shows a moderate increase in prices across the board in Brazil. Specifically in Sao Paulo, the square metre has gone up by 4% to reach an average of R$9,622. Rio de Janeiro saw a similar rise (3%) with a slightly lower average of R$9,604.
Rio, however, is home to the most expensive real estate in Brazil. In the district of Leblon, the average square metre costs R$21,686, while in Ipanema, it stands at R$18,892. Luxury property in Sao Paulo averages around R$15,000, although prices for luxury developments in the pipeline are considerably higher. In the Itaim Bibi and Vila Nova Conceição districts in the city, the square metre price could exceed R$40,000.