After three consecutive years with the number of launches and sales of properties falling, the real estate market in the city of São Paulo started to grow again last year.
Real estate sales reached 23.6 thousand units in 2017, an expansion of 46.1% compared to 2016. The result surprised the sector, which expected a growth of 5% to 10% in the year.
The survey was released last Tuesday by the Housing Union of the State of São Paulo (Secovi-SP) and considers only new residential properties. Flávio Amary, president of the union, attributed the strong growth of the sector to the recovery of the Brazilian economy, with reduced interest rates and stability in the level of jobs, which helped to partially restore consumer confidence.
The launch of new projects also grew, totaling 28.7 thousand units – an increase of 48% in relation to 2016, when there was a retraction of 15.7%.
According to Amary, most of the new projects are related to the growth of the “Minha Casa, Minha Vida” program, which has a more heated demand and good credit conditions. The program was responsible for 4,154 launches in São Paulo in 2016, or 23% of the total. In 2017, this share rose to 10,343 units, 36% of the total.
Economic real estate also boosted the reaction of the sector: most of the units launched and sold had two rooms, measured less than 45m² and cost up to R $ 240 thousand.
The PSV (Global Sales Value) – which adds the potential sales value of all units of a project to be launched – went from R $ 8.9 billion to R $ 11.4 billion.
Forecast for 2018
For 2018, Secovi’s forecast is for stability in the number of launches and an increase of 5% to 10% in sales compared to last year. Celso Petrucci, chief economist at Secovi-SP, explains that the projection considers that 2018 has a calendar with World Cup, presidential elections and many holidays, which harms the market. He anticipated that business in January showed a good performance, so that the number of launches and sales should exceed those of the same period last year.
In the annual comparison, the price of the launched properties was stable, with the square meter costing around R $ 8,700.
The president of Secovi-SP also affirmed that the price of houses, in general, has not increased at the same pace as the market’s reheating. “Prices are not yet following the recovery, they remain stable. Some regions have the same prices as months or even years ago,”he said.
A study released yesterday by the Brazilian Association of Mortgage and Savings Entities (Abecip) demonstrates this. The average price of residential properties in the country increased slightly by 0.03% in January compared to the same month last year. In the last 12 months, the average price of houses fell by 0.36%. The survey considers the values of properties sold through financing.