Mortgage lending in Ceará jumps by almost 250%

Mortgage lending in Ceará jumps by almost 250%

In tune with the heightened activity in the property market this year, mortgage lending in Ceará saw a massive uptick in Q1. The number of new loans almost tripled compared to the same period in 2020 and the volume nearly doubled. These surges lead analysts to point to a forthcoming shortage of new property and rising prices for Ceará real estate.

Mortgages in Ceará almost triple

The latest figures from the Brazilian Mortgage Association (ABECIP) show that Ceará currently has one of the hottest markets in Brazil. From January to March, banks approved 3,848 loans in the state for property purchases.

This total represents a rise of 248% on the same period in 2020. In March alone, buyers in Ceará took out mortgages on 1,537 properties.

Volume of mortgage lending in Ceará nearly double

As well as a vast increase in the number of units mortgaged, Ceará also saw a giant uptick in the volume of loans. In Q1 this year, the volume reached R$769, an increase of 187% on the same quarter in 2020.

Mortgage lending in Ceará ahead of national average

Mortgage lending in Brazil as a whole also surged in the first three months of this year. ABECIP statistics show that the number of loans rose by 112.8% across the country. Furthermore, the volume in March – R$18.35 billion – was the highest monthly figure since records began in 1994.

“This is an extremely positive statistic for the Brazilian market, particularly with regards to the international scenario,” said Christiane Portella, President of ABECIP. “And when we look specifically at the figures for Ceará,” the number is almost triple the average for Brazil,” she added.

Strong outlook for 2021

Based on the figures for Q1, regional analysts believe that the Ceará property market is set for a buoyant year. Tiberio Benevides, President of the state association of real estate agents (CRECI-CE), says that sales will continue to grow over the next few years.

“We firmly believe that this year, we will see a rise of at least 18% on 2020,” he said. “And we’re hoping to reach 22%.”

Potential shortage of stock

A collateral of strong demand is always a drop in supply and Ceará is no exception as the President of the Ceará Civil Construction Union (Sinduscon-CE) points out. According to Patriolino Dias, 2014 and 2015 saw the launch of a number of new developments and this hasn’t happened to same extent since then.

Benevides says that the supply of new-builds in Ceará has dropped to almost 10% over the last four years. This will, according to Dias, mean that “new property will run out in the state in around 18 months”. He predicts a severe shortage in the second half of 2022.

Higher prices for property in Ceará

Hand-in-hand with lack of supply go price hikes and all analysts believe these are on the horizon for Ceará real estate. While demand continues for quality and more spacious homes and mortgage lending in Ceará remains high, prices will slowly edge their way upwards.

“It’s more than worthwhile investing at the moment,” said Benevides. “Property always was and will be good business in the medium and long term.”

(Source: Diario do Nordeste)