The Brazil property market is on the rebound as sales of luxury property are starting to boom in major cities.
It took less than a month to sell half the units in a Sao Paulo luxury apartment building earlier this year, even though construction won’t be complete until 2022.
The luxury residential property market in Brazil’s biggest city is booming with demand from rich Brazilians, fed up with the toll record low interest rates are taking on their portfolios.
Gone are the days of double-digit returns on simple treasury securities, so many of the rich are trying to capitalize on soaring prices in the high-end real estate market, and overseas property investors are climbing on the bandwagon.
Apartments in Vila Nova Conceicao, the most expensive neighbourhood in Brazil, are selling for as much as 13.5 million reais ($3.4 million). Costs have jumped as high as 35,000 reais per square metre from about 25,000 reais five years ago.
‘The residential real estate market is recovering due to the effect of low interest rates, but there is also more confidence with expectations the Brazilian economy will perform better,’ said Thiago Alonso de Oliveira, CEO at JHSF Participacoes SA, a development company that owns the Fasano brand.
Brazil’s gross domestic product is expected to expand 2 per cent this year, up from 1.1 per cent in 2018 and 2017, according to data compiled by Bloomberg.
New residential sales in Sao Paulo surged 39 per cent in the 12 months through February, to 932.5 million reais, according to builders association Secovi-SP. The number of units sold jumped 50 per cent to 2,176. Among all new apartments with three or four bedrooms offered during the period, 45 per cent were sold.
The Fasano apartments will be built in the luxury neighbourhood of Itaim, at about 33,000 reais per square metre. New zoning rules in Sao Paulo that permit taller buildings close to public transportation will allow the developer to build 40-story towers with two penthouses and just two apartments per floor.
Most apartments will be 290 square metres (3,100 square feet), and the two penthouse units will be 500 square metres. The complex will also have space for three restaurants, a pool and a bar.
With other developers following suit, it looks like exciting times for the Brazil luxury property market, and Sao Paulo in particular.