Investors can’t get enough of high-end real estate this year, and as a result, this sector is booming. The latest figures for luxury property sales in Brazil show an increase of 109% in the first three months of the year. Launches, too, have experienced a surge as high-end homes soar in popularity across the country.

Luxury property sales skyrocket

Figures from the Brazilian Association of Real Estate Developers (ABRAINC) for Q1 point to a buoyant market, particularly in the new-build sector. The 36,982 transactions represent a 6.2% increase compared to the same period last year. 

However, luxury property sales in Brazil outperformed all other types of real estate. In this sector, transactions skyrocketed by 109% between January and March. In total, 9,553 new units in the medium to high price range changed hands. 

Increase in luxury property launches 

This continued surge in demand has led developers to launch more projects. As a result, around 27,000 new-build units joined the property market in the first quarter. The figure is 35.6% higher than last year. 

Furthermore, the rate of cancellations in reservations for new builds dropped. Developers reported a 1.7% decrease this year. 

Solid demand for high-end homes

A recent survey on buyer intention in Brazil shows proof of strong buyer interest. Its results revealed that 34% of those interviewed intend to buy property within the next year. 

Luxury property is a particular target in this sense since the highest demand lies in the upper echelons, according to Patriolino Dias de Sousa, President of the Civil Construction Industry in Ceará (Sinduscon-CE).

Solid investment prospects

Analysts attribute the surge in luxury property sales in Brazil to two factors. 

Safe bet against inflation

Firstly, homebuyers and investors view real estate as a solid asset in the face of rising inflation. “Brazilians see the purchase of a property as a way of protecting some of the assets from high inflation,” said the President of ABRAINC, Luiz França. 

Brazil, like most countries worldwide at the moment, is battling against high inflation rates. In May, for example, inflation stood at 11.73%, although the monthly figure was slightly lower than April’s. 

Real returns in the long term

Secondly, investors perceive Brazilian real estate as an asset capable of producing solid returns in the long term. This ability contrasts strongly with other traditional boltholes such as stocks and shares, currently subject to rollercoaster variations.

By mid-June, the Brazilian stock market, the BOVESPA, had gained little since January. In early June, for example, it registered several daily sessions with negative activity. 

In contrast, property has proved a reliable asset in a market where solid demand features as a driving factor. As a result, real estate prices in Brazil are gradually rising in tandem with rental rates.  

(Source: ABRAINC)