Window in the market for high-end Brazilian real estate

Window in the market for high-end Brazilian real estate

High-end Brazilian real estate has enjoyed a busy year on the back of growing demand for more spacious homes with luxury fittings. Analysts believe there’s considerable room for growth within this niche sector, particularly in sought-after locations in the country. As a result, estate agents and developers believe there’s a window in the market for prime properties in Brazil.

Shortage of high-end Brazilian real estate

Sao Paulo is one such example. The financial capital of Brazil has an extensive supply of mid-range apartments. However, the city has an acute shortage of larger properties despite considerable demand from buyers.

A recent report from Lopes Market Intelligence found that Sao Paulo has a supply of 66,600 new apartments on the market. Of these, 45,000 are known as “compact” and came in at under 45 square metres. There were far fewer high-end properties and just 1,060 with over 180 square metres. 

Location rules purchase criteria

A property’s situation is an important consideration in any purchase but fundamental when it comes to prime real estate. A shortage of land in the most sought-after locations such as Jardins in Sao Paulo tenses supply.

The state of Ceará has experienced a similar situation. The lack of land in desirable locations in the capital Fortaleza has led affluent buyers to seek homes elsewhere in the state. Consequently, beach resorts such as Flecheiras in the north and Aquiraz in the south have appeared on the radar for luxury real estate.

Communal areas have also become a priority for buyers. “The idea that rich people don’t use the swimming pool has changed,” said the Director of Lopes, Cyro Naufel. As a result, developers must include a pool within the complex and create areas designed by established brands and landscape artists.

Changes in the Brazilian property market

According to Naufel, the Brazilian real estate sector has become considerably more professional over the last few years. Technology is here to stay and has become a fundamental part of the purchase process.

Another significant change has arrived in the shift in the focal point – it no longer lies with the property but with the client. Purchases now look to solve the client’s problems through buying a luxury property.

Prospects for 2023

High-end Brazilian real estate has reached the next level”, says Naufel, “and this scenario shouldn’t change much over the next few years.” He expects 2022 to end with a 2% increase in launches of new property in Sao Paulo, “a far better figure than the market expected”.

For 2023, he predicts a scenario of controlled inflation on a downward trajectory. In turn, lower inflation should lead to a drop in interest rates in Brazil. Most analysts forecast this decrease will take place in the middle of the year. This in tandem with a fall in unemployment “creates excellent circumstances for the Brazilian property market”.

(Source: Valor Economico)