First Brazilian Property Price Index Expected by the End of the Year

Laguna Beach - Beach4The Brazilian government looks set to approve the first ever Brazil Property Price Index, with state and regional statistics expected by the end of the year. It is being developed by the Brazilian Statistics Agency, and will be based on property market research and mortgage lending.

The news is being welcomed by property investors in the country, as they believe it shows the market is maturing. The new index should provide greater transparency and allow investors to make more informed decisions.

The central aim of the new index is to provide accurate data and a snapshot of prices in Brazilian cities, states and regions. Later on, it’s expected to give more detailed studies of property prices in individual neighbourhoods, making it easier to identify trends and possible bubbles within the market.

At the moment property prices in Brazil are continuing to increase. The latest data from the Economic Research Foundation Institute indicates that prices have already risen by an average of 17% this year, with prices in Rio de Janeiro up by 23%. This equates to an increase of 43% year-on-year, with many analysts believing the Olympic Games to be responsible for these considerable increases.

While growth remains strong, there has been a slowdown in monthly increases. However, this is being viewed positively by economists because we all know what happens to a market when prices grow too quickly so as to price the local population out of home buying. That said, the mortgage market is still infantile, and there is plenty of rental demand.