Strong start to 2021 for Ceará property market

Strong start to 2021 for Ceará property market

After finishing 2020 with record hikes in mortgage loans and booming sales, the Ceará property market has made a very strong start to 2021. The latest figures for mortgage lending in January indicate this year will also see big interest in real estate, both for first and second homes.

Giant leap for mortgage lending in January

Ceará finished 2020 with record lending figures when they increased by their highest since 2015. However, those for January this year have gone one step further.

According to the latest statistics from the Brazilian Mortgage Association (Abecip), mortgages were approved for 1,441 units in Ceará in January. This represents an increase of almost 270% on the same month last year.

Values for mortgage loans have also soared. In January, they reached R$262.3 million, an uptick of over 190%. As the graph below clearly illustrates, the number of mortgages in the state has risen exponentially since April last year. The rise also indicates the current strength of the Ceará property market.

graph showing mortgage loans in Ceará in 2020

Shortage of second homes in Ceará

Analysts attribute the strong rise in mortgage lending to two factors. The first is the record low interest rate, currently at 2%. The second is found in the property prices themselves.

“It’s the combination of low interest rates and good-value properties,” said Patriolino Dias, President of the state civil construction union, Sinduscon-CE.

Quoted in the regional broadsheet Diario do Nordeste, Dias also mentioned that the interest in property is not just limited to Fortaleza but spread across the state. “The supply of second homes has now run out,” he said.

Strong end to 2020 for Ceará property market

Record mortgage lending in 2020 went hand in hand with a big increase in purchase of resale properties in Ceará and rentals. According to the platform Kenlo, the state saw a rise of 45.18% in rentals and resales last year.

The second half of the year performed particularly well. The number of contracts signed in Q3 was 66.41% higher than the same period in 2019. In Q4, they rose by 59.55% compared to the last quarter in 2019.

When rental contracts are taken out of the mix, the increase in resale transactions was 36.9% in 2020 compared to the previous year.

The same trend also emerged in sales of land plots in Ceará. 2020 was a record year for this type of transaction, indicating the underlying strength of the Ceará property market.

Prices higher in coastal areas

The Kenlo analysis found that prices for property in Ceará fell by 2.7% in general terms. However, this figure is far from even.

Resale properties in Fortaleza, for example, experienced a marginal drop of 0.4% while prices for coastal homes in Ceará increased. Those in Aquiraz went up by 11.5% to reach the highest average in the state (R$557,500).

Analysis attribute increases in coastal areas to the Brazilians’ desire to live outside urban areas in larger detached properties. This trend is likely to continue throughout 2021.