Brazil Property Prices Up Almost 100% in 3 Years

Property prices in Brazil have nearly doubled in the last three years, and while this has led some people to believe that a property bubble has formed, others still remain extremely optimistic that the market will remain buoyant for quite some time to come.

Residential property prices in Rio have risen 99% since early 2008, while property in São Paulo has risen by 81% according to recently launched price index, Fipe Economic Research Institute.

The picture is less clear in other cities due to their lack of official data but Brasilia and Salvador in particular have enjoyed property booms. The numbers of real estate agents is increasing as more than 3300 were registered in Rio last year which is 10 times the number of registered 2005.

The central business area in Rio has overtaken Manhattan’s midtown district as being the fourth most expensive city in the world in which to rent office space, with only Hong Kong, London and Tokyo being more expensive.

It does seem as if the boom is well founded as the country is enjoying high employment while a booming economy is helping growing numbers of people get a foot on the property ladder, especially as the mortgage market is also expanding rapidly.

As yet the mortgage debt in Brazil is still quite low at around 4% of GDP when compared to 15% in China in 2009, with even higher levels in more developed economies. The housing deficit is currently estimated to be more than 7 million units which is an awful lot of homes to be built.

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