Recently updated statistics released by research organisation Ibope Intelligence has indicated that residential Brazilian real estate prices have shown some initial signs of moving away from the rapid growth that has characterised market behavior in recent years.

In Rio de Janeiro city, the research pointed to average prices rising by 27 percent from 2009 to 2010 and 19 percent from 2010 to 2011.  In Porto Alegre – which Ibope view as a more stable and constant region – the rise was measured at 25 percent for the 2009-2010 period and 17 percent for 2010-2011.

In São Paulo, price statistics also demonstrated eventual stabilisation: a rise of 24 percent between 2009 and 2010, 30 percent between 2010 and 2011 – but then from April to October, there has been slower growth of 14 percent.  According to separate research by the Secovi organisation, the number of Paulista sales dropped 17.9 percent to 2,234 housing units between July and August.  The pace of sales in the region – measured by the ratio of sale on demand – fell from 16.9% to 13.3% and it was also stated that in August, 3,687 housing units were launched – double the level in comparison to the same period of 2010.

Ibope findings also pointed out that a lack of launches happening in Rio de Janeiro and Recife has served to boost the values of resale properties in the area.  In 2011, just 38,000 units will have been launched in Rio de Janeiro – which is widely believed to be far short of what is needed for a city undergoing rapid expansion.

Antônio Carlos Ruótolo, geo-economic researcher at Ibope stated that: ‘it has become clear that the market is peaking and a correction is inevitable – however it is still not certain when this will happen.’  The researcher nevertheless believes that the overall market should continue to remain buoyant due to low unemployment levels and other national economic advancements being experienced in Brazil.

Ruban Selvanayagam www.brazilinvestmentguide.com