Trends to expect in the Brazilian property market in 2024

Trends to expect in the Brazilian property market in 2024

After a busy year for sales and launches, what can investors expect from the Brazilian property market in 2024? This article examines the probable trends in prices, sales and interest rates, all of which should continue to warm up the market over the next 12 months.

Prices to continue to rise 

According to the latest FipeZAP Index, real estate prices rose by an average of 5.13% across Brazil. The increase is slightly ahead of inflation and hides regional differences. For example, the city of Maceió experienced the highest jump, with an uptick of 16%. However, prices in Rio de Janeiro saw a minimal rise of 1.42%. 

Analysts concur that prices will continue their upward trend this year. However, the Brazilian property market in 2024 will show moderation as it did in 2023. 

“We can expect property prices to follow a positive trend of stabilization in 2024,” said Pedro Tenório, an economist with DataZAP. “We predict a slightly higher rise this year than in 2023, but not necessarily in line with the uptick seen in 2021 and 2022. 

The Fitch Ratings Global Housing and Mortgage Outlook 2024 also forecasts a similar price rise in Brazil this year. It expects an uptick of between 4 and 6% over the next 12 months. 

Positivity in line with the Brazilian economy 

Analysts point to the solid performance of the Brazilian economy last year and the expectations for its performance during 2024. The real estate sector will be one of the beneficiaries of continued low inflation, a consolidated job market and growing foreign direct investment.

Lower interest rates to stimulate demand 

Cheaper mortgages will be one of the headlines for the Brazilian property market in 2024. The Brazilian Central Bank initiated a downward trajectory in interest rates in the second half of 2023 and economists forecast a continuation of this trend this year. 

Many predict the Selic to fall to 9% by the end of the year, a measure that will stimulate the real estate market in two ways. Firstly, cheaper mortgage loans will encourage would-be homeowners to enter the market. Secondly, more investors will enter the property market in search of assets that offer higher returns than interest rates.

Higher sales in 2024

According to the Brazilian Association of Property Developers (ABRAINC), sales of new properties soared in Brazil last year. In the first 10 months of the year, the volume of new-build sales rose 22.2% compared to the same period in 2022. Fortaleza was one of the leading lights for new property launches in Brazil.

Sales of medium to high-end homes went up by 12.5% to reach 34,103 units. Their total venue also increased to reach R$15.7 billion, 8.7% higher than in 2022. 

Analysts expect a similar trend during 2024, particularly on the back of high demand and lower interest rates. “The consolidated figures for the first ten months of 2023 reflect that dynamic Brazilian property market,” said Luiz França, President of ABRAINC. He predicts more of the same during this year. 

Sustained demand in the Brazilian property market in 2024

Analysts believe that demand will boost the real estate sector this year, with that demand coming from two sectors: Brazilian homebuyers and foreign investors. 

“Brazilians are more optimistic because unemployment has fallen and GDP is expected to grow,” said Bruno Sindona, Advisor to the Brazilian government’s Sustainable Economic Development. “If we add this to improvement in loan conditions, we should see significant growth in the Brazilian property market in 2024”. 

A Brain Intelligence Strategic survey reflects this optimism among Brazilians. In 2023, 39% expressed the intention to buy a home over the next 24 months.

(Sources: Isto é Dinheiro, ABRAINC, Fitch Ratings)