Demand for Brazilian real estate increased by 6% in the year to September, confirming the hot market among would-be buyers. The latest uptick in demand comes in tandem with further house price rises, up by 5.29% in 12 months.
Intention to buy highest since May 2021
The latest Brain Intelligence Estrategica survey has revealed that Brazilians continue to intend to buy a home. 39% of those interviewed in the August report said they planned to purchase within two years.
The figure is 2 points higher than June and 6 points above September 2022. It’s also the highest percentage since May 2021, when the Index reached 42%.
Reasons behind the rise in demand
Analysts point to the economy’s improvement as one of the main reasons behind the recent rise in intention to buy. “It’s a steady movement upwards,” said Fabio Araujo, Director General of Brain.
He also pointed out that the demographic most interested in buying is Generation Z. Among Brazilians aged 21 to 26, 45% said they plan to purchase over the next two years. Araujo believes this percentage proves that contrary to popular conception, young people don’t necessarily prefer to rent.
More popular locations and types of property
Within Brazil, the Centre-West and North are the preferred regions to buy real estate. Araujo attributes the focus on the Centre-West to the growth of agribusiness in the region. He pinpoints the interest in land as an investment option because of the high return potential.
When it comes to preferred property type among Brazilians, detached houses are the most desired homes, with 55% of the survey sample expressing the wish to buy one. 36% of those interviewed said they would buy an apartment.
Brazilian real estate prices increase
This continued demand for property in Brazil continues to push house prices up. For example, they rose by 0.45% in September, on a par with the uptick in August. Prices for one-bedroom homes experienced a surge of 0.54%.
The latest figures bring the annual rise to 5.29%, almost double inflation (down 5.97%) in the 12 months to September. House price increases in many of Brazil’s largest cities surpassed this figure, led by Maceió (up 17.62%) and Campo Grande (up 15.93%).
Strong Q4 on the horizon
Araujo claims that the intention to buy will continue to rise, driven by an improving economic outlook and the expected increase in new construction. As a result, he predicts a strong last quarter of the year for Brazilian real estate.
(Sources: Valor Económico, FipeZap)
