Average Apartment Price in Brazil rises 54.4% in 5 years: A detailed analysis
The average price of apartments in Brazil has risen 54.4% in the last five years, as revealed by the survey “National Real Estate Indicators of the 1st Quarter of 2024”, released by the Brazilian Chamber of the Construction Industry (Cbic). This significant growth reflects the dynamics of the Brazilian real estate market, influenced by several economic and political factors.
What does the Cbic research show?
Cbic research indicates that the residential apartment price index reached 171.9 points in the first quarter of 2024, compared to 111.35 points in the same period in 2019. In the previous quarter, ending in December 2023, the index was at 168.85 points, representing an increase of 1.8% in the quarterly comparison.
- Price Evolution : The 54.4% increase in prices over five years highlights the continued appreciation of the real estate market, driven by a series of economic factors, such as inflation, growing demand for properties and housing incentive policies .
Growth in Sales of Residential Units
According to Cbic, the first quarter of 2024 saw a 6% increase in the number of residential units sold, totaling 81,376, compared to 76,794 units sold in the same period last year. The 12-month period up to March 2024 totaled 331,311 units sold, an increase of 3.9% compared to the previous 12 months.
- Increase in Sales : This growth in sales indicates robust demand for residential properties, possibly driven by factors such as lower interest rates and housing incentive programs.
Impact of the Minha Casa, Minha Vida Program
The Cbic report highlighted that the federal government's Minha Casa, Minha Vida (MCMV) program played a significant role in increasing sales. In the first quarter of 2024, 31,407 units of the program were sold, an increase of 21.3% compared to the same period in 2023.
- Influence of the MCMV : The success of the Minha Casa, Minha Vida program demonstrates the effectiveness of public policies to encourage popular housing, which have facilitated access to housing for low-income families.
Property Launches
The first quarter of 2024 recorded a 9.6% drop in new property launches, totaling 56,355 units, compared to 62,312 launches in the same period in 2023. Cbic attributed this drop to excessive delays in new licensing.
- Challenges in Launches : The reduction in the number of new property launches points to challenges in the licensing and approval process for new projects, which could negatively impact the future supply of properties.
Technical and Critical Analysis
The rise in apartment prices in Brazil can be seen both positively and negatively. On the one hand, real estate appreciation can be interpreted as a sign of economic strengthening and increased demand. On the other hand, rising prices can make purchasing property more difficult for many families, especially in a scenario of economic inequality.
- Positive Outlook : The appreciation of real estate can attract investments and stimulate the growth of the construction sector, generating jobs and boosting the economy.
- Negative Outlook : Rising prices could worsen the housing crisis, making access to housing more difficult for the low-income population and increasing pressure on social housing programs.
Concluding
The 54.4% growth in the average price of apartments in Brazil over the last five years is an important indicator of changes in the real estate market. Despite the increase in sales and the positive impact of the Minha Casa, Minha Vida program, challenges related to the launch of new properties and price accessibility remain.
We would like to know your opinion! Leave your comments on how you see the price of apartments evolving in Brazil and what your expectations are for the real estate market in the coming years.
