Following numerous years of growth, Brazil has begun to fear the onset of a real estate bubble. In recent years a great number of foreign investors have invested in luxury residences in Brazil. Subsequently, leading to financial growth in the Brazilian economy in preparations for the Football World Championships and the Olympics which will take place in two years time in Rio de Janeiro.
However, there have been a number of alarm bells and the experts at AFP fear that the real estate bubble may very well explode in the near future. At present a 25 square meter apartment in São Paulo can be sold at 500 thousand dollars, almost 360 thousand euro.
A number of experts have speculated that the climax of prices is now a part of the past, since 2008 when Brazil assisted the boom following the substantial interest for real estate in the country. The most sought-after areas are São Paulo, Rio de Janeiro and along the coast.
In that period the increase in prices reached an impressive 40% per year, a reality that is no longer seen today, the situation has since stabilized. Nonetheless, those who work in the real estate field still prove to be content with the progress of the real estate market. Although the numbers have dropped, growth continues and prices are still doubled.
Taking the high-end properties in Rio de Janeiro as an example, an evolution in prices can be clearly noted in the space of six years, with prices tripling and an increase of 15.2 % in the past year. 2014 has also gotten off to a good start, with just three months until the World Football Championships, prices continue to rise. A property costs an average of 5,770 dollars per square meter, almost 4,000 euro, in Ipanema, one of the most chic and sought-after neighborhoods in Rio. Renting a 60 square meter apartment would come to around 2,650 dollars monthly, around 1,910 euro.
