Oct. 26 (Bloomberg) -- Sao Paulo new-home prices climbed 14 percent in the past seven months as surging real estate demand in Brazil showed few signs of ebbing, according to an index released today that measures values by square meter.
Prices also rose by at least 11 percent in Rio de Janeiro, Porto Alegre and Recife from April through this month, Ibope Inteligencia said in a report. The average price per square meter of a new home in Sao Paulo, Brazil’s biggest city, was 6,019 reais ($3,400) in October, the research firm said, without giving specific figures for previous periods.
Rising housing demand is being fueled by record-low unemployment, expanding credit and inflation running above the government’s target rate, said Antonio Carlos Ruotolo, director of the company’s business geography division in Sao Paulo. The government’s homeownership initiative known as Minha Casa Minha Vida, which offers cash incentives for home purchases to Brazil’s lowest-earning families, is also bolstering prices.
“There is still no sign of accommodation in real estate prices,” Ruotolo said today in a press conference at Ibope’s Sao Paulo offices. “Price increases are still significant.”
The average price per square meter for a new home in Sao Paulo is up 85 percent since April 2009, Ibope said.
Sao Paulo prices by square meter for previously owned homes, which are made up primarily of apartments, rose 11 percent since April. The increases imply annualized appreciation of 22 percent to 28 percent, Ibope said.
In Rio de Janeiro, the gauge of new home prices per square meter rose 18 percent in the past seven months, and 79 percent since April 2009. The measure of previously owned home prices increased 19 percent since April of this year.
Some neighborhoods, which Ruotolo declined to name, showed a decrease in both new and existing home prices for the first time since Ibope began collecting the data in 2009.
The declines were “an exception” to the trend but could be the first indicators of a slowdown in housing prices, he said. “‘It all depends on the economy.’’
To contact the reporter on this story: Gabrielle Coppola in New York at email@example.com
To contact the editor responsible for this story: Kara Wetzel at firstname.lastname@example.org