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Shiller Warns of Housing Bubble After 225% Surge: Brazil Credit

Robert Shiller, who predicted the collapse of the U.S. housing market, is warning that a bubble is emerging in Brazil at a time when a sluggish economy and persistent inflation are eroding investor confidence.

Since January 2008, home prices in Sao Paulo have soared 181 percent and jumped 225 percent in Rio de Janeiro, according to the FIPE Zap index. That’s as much as twice the increase in rent prices, signaling that the housing market has become overheated, according to Shiller, a Yale University professor who helped create the S&P/Case-Shiller Index of U.S. home prices, which has dropped 13.7 percent since 2007.