Like real estate worldwide, property in Brazil has enjoyed a buoyant market since the arrival of the pandemic. But there’s one particular sector that is moving at higher levels than the rest: the Brazilian prime property market is currently experiencing an unprecedented boom with an 80% uptick in volume of business.
Shift in working patterns
The pandemic has fundamentally changed some aspects of our lives, particularly when it comes to where we do our jobs. Remote working replaced all but essential office jobs for months and many employees have yet to return to their usual workplaces. As a result, home offices are at a premium.
In Brazilian cities, particularly Sao Paulo, the shift has prompted a surge in demand for larger homes with space for an office. “People are now working from home as they were in the company office and enjoying a better quality of life,” said Álvaro Coelho da Fonseca, President of the Brazilian real estate development company with the same name, quoted in Forbes Brazil.
Shift towards Brazilian prime property
In turn, the change of office location has led families to reconsider where they live. “Many executives have realised that being shut in a city like Sao Paulo is the worst possible alternative,” said Coelho da Fonseca. “Instead, they have decided to give their families the chance to live in the countryside or by the beach and enjoy a home that offers quality leisure time.”
As a result, Brazil has seen a significant increase in the demand for property from high-end clients. Marcello Romero, Director of Bossa Nova Sotheby’s, says that the surge of demand has led to a surge in purchases of Brazilian prime property.
“Since 2020, we have experienced a 159% rise in sales and a 78% uptick in business volume,” he said. Romero also pointed out that these figures show that the average purchase price has also increased.
Dollar reserves
Another reason behind the rise in the prime property sales lies in dollar reserves owned by affluent Brazilians. Buying real estate in Brazil in US dollars offers considerably more purchasing power – earlier this year, Forbes calculated that it could be as high as 32%.
“Many Brazilians who have dollar reserves are placing their bets on the real estate market,” commented Marco Videla Lima, Director of Esquema, a large estate agents specialised in Brazilian prime property. “They’re doing so now in the light of a possible devaluation in US currency in the short or medium term,” he added.
In April this year, Forbes said that Brazil is “the overall champ for currency discounts” and recommended investors to make the most of this year. “Perhaps the best time in our lifetime to buy in Brazil,” said the broadsheet.
Examples of price rises in luxury property
The article in Forbes Brazil went on to list some examples of the sharp increases in prices for Brazilian prime property over the last 12 months. For instance, Sotheby’s quoted a building in the district of Itaim in Sao Paulo. At the end of 2019, the selling price per square metre was R$17,000. However, a few months later, the price has risen to R$42,000, an increase of almost 60%.
Another example lies in Fazenda da Grama, 80km outside Brazil’s financial capital. In 2019, land plots on the site sold at around R$1 million. In mid-2021, their asking prices have gone to up to R$4 million and as high as R$5 million for frontline golf plots.
Prime property market set to remain busy
Experts believe the current trend of high demand for prime real estate is here to stay over the next few years. “We believe the shift will lasting and won’t disappear as soon as we’re all vaccinated and the pandemic has disappeared,” said an executive from JHSF, a leading developer of high-end property in Brazil.
(Source: Forbes Brazil)
