5 signs economy is hitting Real Estate market in Brazil
Brazilian property market is living an stagnation process as the economy is getting worse. Even if there has not been an official bubble burst, prices are deflating if we consider that in the last five years they had been tripled, even quadrupled in Rio de Janeiro. In real terms prices have fallen -3,65% since inflation is higher than the price annual increase. Some important indicators are:
Weak growth. GDP Annual growth rates are negative falling of around 4,5% and leaving it at -1,7% in December '15. GDP per capita and per family will be affected.
Unemployment rate. 2015 started with a 5,3% of unemployment and has raised to 7,9% until December. This will reduce the purchasing power.
High inflation. It has gone from 7,14% to 10,43% in December 2015 and this keeps property prices higher.
Interest rates (SELIC) increase. They have raised from 11% to 14,25% in 2015 but it has been steady for the last 3 months.
Sovereign debt. As a percentage of GDP has increased to 58,91% and this could mean an increase in taxes.