In Sao Paulo, real house prices were down slightly by 0.68% during 2022

Brazil's housing market seems to be stabilizing, buoyed by rising property demand and supply. In Sao Paulo, inflation-adjusted house prices fell slightly by 0.68% during 2022, an improvement from a year-on-year decline of 5.39% in 2021. On a quarterly basis, Sao Paulo prices were down by just 0.22 % in Q4 2022.

Inflation-adjusted house prices in the capital city have been falling since 2015, and the rate of decline has intensified again since the Covid-19 pandemic. 

 

Demand rising, but sociopolitical tension continues

During 2022, the total number of new residential units sold in the city of Sao Paulo reached 69,340 units, up 4.9% from a year earlier, according to Sao Paulo State Housing Union (Secovi-SP). There is also a renewed interest by foreign investors on Brazilian real properties recently, which is expected to boost the housing market further in 2023. Foreign individuals and nonresidents may invest in urban and rural properties in Brazil through direct ownership from abroad, or through resident companies or partnerships.

But sociopolitical unrest continues. During the onset of the pandemic, President Jair Bolsonaro had been widely criticized for his handling of the health crisis, refusing to support measures to halt the spread of the virus. In July 2021, tens of thousands of people have taken to the streets to protest amidst the recent allegations of corruption involving the purchase of vaccines by the government. In fact in October 2021, a Senate investigative committee found that Bolsonaro committed nine crimes related to his administration’s handling of the health crisis, amidst delayed vaccines, oxygen shortages and ineffective treatments. 

With the incumbent president’s poor approval ratings leading to the October 2022 general elections, it is not surprising that he lost to leftist rival, ex-president Lula da Silva, who was inaugurated as president on January 1, 2023. However in November 2022, Bolsonaro filed a petition with the country’s election authorities formally contesting the results of last year’s fiercely contested general elections.

Rents, rental yields: rental yields are moderate ranging from 2.76% to 9.85%

Brazil: typical city centre apartment buying price, monthly rent (2-BR apartments)
	Buying price	Rate per month	Yield
Sao Paulo	$144,495	$578	4.8%
Rio de Janeiro	$169,614	$604	4.3%

Recent news. Brazil’s economy expanded by a modest 2.9% in 2022 from a year earlier, a deceleration from an annual growth of 5% in 2021, amidst rising interest rates, according to the Instituto Brasileiro de Geografia e Estatística (IBGE).

The Brazilian economy is projected to expand by a meager 1.2% this year, based on forecast released by the International Monetary Fund (IMF).

In February 2023, the Central Bank of Brazil left its benchmark Selic rate at 13.75%, after raising it five times since February last year, in an effort to rein in inflationary pressures. The latest move signals a more cautious stance due to fiscal risks associated with the policy decision. The key rate remains at its highest since November 2016. Nationwide inflation slowed to 5.77% in January 2023, its lowest level since February 2021. Inflation reached a 19-year peak of 12.47% in April 2022.