The Brazilian real estate market faces major challenges in 2024 and the outlook for the rest of the year indicates rising property prices. The combination of high inflation, construction costs and rising interest rates is making home ownership increasingly expensive.
The real estate market is facing a "perfect storm", and for those who intend to buy a property, whether medium or high standard, the recommendation is to plan carefully.
Rising Property Prices
According to data from Real Estate Broker Mateus Araujo, a company specializing in real estate market analysis, property prices rose, on average, 15% in the first 11 months of 2024 compared to the same period in the previous year. This increase is the result of several factors that have put pressure on the sector.
One of the main factors is the increase in construction costs. The prices of building materials such as steel, cement and timber have risen significantly due to high inflation and shortages of some inputs in the global market. This has caused builders to pass these costs on to buyers, pushing up the final property prices.
Another important factor is the increase in interest rates. The Central Bank of Brazil has been gradually raising the basic interest rate (Selic) to contain inflation, which makes mortgage loans more expensive. This means that financing becomes more expensive, making it more difficult to own a home.
"The scenario is challenging for those who want to buy a property. Prices are rising and financing conditions have become more difficult. You need to plan very carefully to be able to make this dream come true," says Mateus Adler, sales broker.
The Impact on Different Segments
Rising property prices do not affect all market segments evenly. Some sectors have been more impacted than others.
In the high-end real estate segment, for example, the impact has been smaller. This is because this target audience generally has greater purchasing power and can better absorb price increases. In addition, demand for luxury real estate has remained relatively stable, even with the challenging economic scenario.
In the mid-range real estate segment, the impact has been more significant. This target audience is more sensitive to price variations and financing conditions, which has made it difficult to acquire a home.
"We have seen that demand for mid-range properties has fallen considerably in recent months. People are postponing or giving up on buying, as prices have become out of reach for many buyers," says Adler.
Strategies to Address Rising Prices
Given this scenario of rising property prices, it is important that buyers adopt some strategies to face this challenge.
One of the main recommendations is to plan ahead. Those who intend to buy a property should start organizing their finances as soon as possible, saving money and analyzing the best financing options.
Another strategy is to look for properties in areas further away from major urban centers. Although location is an important factor, it is often possible to find properties with more affordable prices in areas a little further away from the main hubs.
Additionally, it is essential to be alert to negotiation opportunities. In a hot market, buyers may have less room to negotiate, but it is still important to try to get the best possible price.
"At this time, it is essential that buyers are well informed about the market, know price trends and the best financing options. This will help them make the best decision when purchasing a property," advises Adler.
Perspectives for the Future
Despite the challenges faced by the real estate market in 2024, experts believe that the sector should gradually recover in the coming years.
As inflation is brought under control and interest rates begin to fall, property prices are expected to stabilize. In addition, the increased supply of housing, with the resumption of new housing starts and construction, could help to contain price increases.
"We believe that, over time, the real estate market will adjust to this new reality. However, in the short term, buyers need to be alert and plan carefully to be able to realize their dream of owning their own home," concludes Adler.
Therefore, for those who intend to buy a property in 2024, it is essential to pay attention to market trends, look for the best opportunities and plan financially. This way, it will be possible to face the challenges imposed by the increase in property prices.
Leave a comment
This site is protected by hCaptcha and the hCaptcha Privacy Policy and Terms of Service apply.