|Real estate going up with a vengeance. Two factors at play.|
- Lowest interest rates ever
- Urban exodus Covid effect
1) Before the pandemic (Nov. 2019) real estate market was already going up as
Each percentage point less in the rate can attract two million families to mortgage, calculate developers.
In the third quarter, (2019) the number of residential properties launched grew 23% in the country. Sales rose 15% over the same period in 2018. There were more than 30 thousand units
Last month: The monthly indicator of the Brazilian Association of Real Estate Developers (Abrainc), prepared by the Foundation Institute for Economic Research (Fipe), registered a 58% increase in sales of new housing units in July compared to the same month in 2019. It was the best result monthly index of the Abrainc / Fipe indicator since May 2014.
2) This movement of urban “exodus” is not new only in Brazil. Other countries have seen this happen during the pandemic, such as the United Kingdom, which has undergone changes in the housing market due to the migration of people who decided to leave London to live in cheaper cities with higher quality and lower cost of living.
It is not yet possible to say whether the exodus will happen in a massive way and if the capitals will be emptied after the pandemic, but it is a fact that it was decisive to change
Brazilians did not dispersed from the major urban centers even though Internet connectivity is widespread and companies digitalize, because of a cultural phenomenon. They love personal relationships. talk and listen rather than write and reading.
The pandemic forced changes in that. It is similar to what happened to banking in the 1980's hyper inflation years, Brazilians abandoned banks as Brazil was a pioneer in bank automation due to the hyper inflation. .