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Nov 30, 2016

Brazil: rental yields low, prices falling


Last Updated: Nov. 30, 2016
RIO DE JANEIRO PRICE/SQ.M. (US$) YIELD (p.a.) PRICE/SQ.FT. (US$)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
Gavea apartments n.a. 5,109 n.a. 475 n.a.
Ipanema apartments n.a. 5,910 n.a. 549 n.a.
Jardim Botanico apartments n.a. 4,904 n.a. 456 n.a.
Lagoa apartments n.a. 5,345 n.a. 497 n.a.
Leblon apartments n.a. 6,378 n.a. 592 n.a.
SAO PAULO
Itaim Bibi apartments n.a. 3,863 n.a. 359 n.a.
Jardim Europa apartments n.a. 4,370 n.a. 406 n.a.
Jardim Paulistano apartments n.a. 4,151 n.a. 386 n.a.
Vila Nova Conceicao apartments n.a. 4,651 n.a. 432 n.a.
Vila Olimpia apartments n.a. 3,608 n.a. 335 n.a.
Source: fipezap.com.br Definitions: Data FAQ See also: Update Schedule

Prices have begun to move strongly down in Brazil, and in terms of US dollars the downward move is much greater because of the decline of the Brazilian Real by 30% over the past three years, with some recovery since the beginning of 2017.

Gross rental yields - what you can earn from an apartment before tax and other expenses - have continued to move down, and in most parts of Sao Paolo and Rio being a landlord generates a much less attractive return-on-investment than it did a few years ago. In Rio, yields of 3.5% to 4.5% are typical, in Sao Paolo apartment yields are rather higher. These are not very attractive returns.

Unfortunately, this year our researchers were not able collect rents figures, so we rely in this explanation on yields figures from last year.






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