Renting Property in Brazil’s Largest Cities Currently a Cheaper Option than Buying
Research by the São Paulo Regional Council of Real Estate Brokers (CRECI-SP) and the Foundation Institute of Economic Research (FIPE) has pointed that even whilst rental figures for housing in Brazil’s two largest cities (Rio de Janeiro and São Paulo) has increased, such numbers are significantly less when considered proportionately to the rise in overall prices.
The statistics, published in Globo’s G1 newspaper, indicated that the prices paid for rental property in Rio and São Paulo between May 2008 and May 2011 increased at an average of 38 percent (R$ 32 per m²) yet sales price averages in the same two cities increased over the same period by 85 percent (R$ 5,313).
As highlighted on this blog and across the Brazilian financial / real estate press, the debate over a housing bubble has continued and, despite moving at a slower pace, rental figures are still remaining above the level of consumer inflation (as measured by the IPCA index) which, according to Eduardo Zylberstajn – coordinator of the FipeZap Brazil real estate index – rose by 18 percent over the same two year period.
Zylberstajn, interviewed by the Globo G1, said that the steep rises come down to the disproportioned levels of supply and demand as well as the fact that access to housing finance has become significantly easier than what was previously the case. He also pointed to another index which the organisation are developing that shows how much more expensive the asking price is in relation to the asking rental figure (the ratio difference between the price per m² of rental and sale) overviewing: ‘purchasing property in Rio and São Paulo is significantly more expensive than renting.’
