Brazil's Home Prices Climb Fast, Raising Concerns About Affordability

(MENAFN- The Rio Times) Brazil's housing market is seeing prices rise faster than at any time in the last ten years, according to official data from the FipeZAP Index.

In the first half of 2025, the average price of a home in Brazil reached R$9,366 ($1,700) per square meter. That's a 7.97% jump compared to last year, and it's the fourth year in a row that home prices have grown faster than inflation.

Some cities stand out even more. Salvador's hom prices went up by 20.63% over the past year, the biggest increase since records began. João Pessoa and Vitória also saw big jumps, with prices rising more than 17%.

In São Paulo and Rio de Janeiro, the increases were smaller but still significant. Demand for homes remains strong, especially for smaller apartments. In São Paulo, home sales rose by 40.6% in early 2025 compared to the year before.

One-bedroom apartments are especially popular, with their prices rising 9.28% in a year. Many buyers are young people or single adults looking for affordable options, helped by government programs for first-time buyers.



However, borrowing money to buy a home has become harder. Brazil's central bank raised the main interest rate (the Selic) to 14.75%, making mortgages more expensive.

While people are still borrowing to buy homes-mortgage lending grew by 32.5%-loans for new construction dropped by almost half. This means fewer new homes are being built, which could keep prices high.

Over the past five years, home prices in Brazil have nearly doubled. In São Paulo, the average price per square meter went from R$7,200 to R$11,800. In Salvador, it jumped from R$4,800 to R$8,200.

Foreign investors are showing more interest, but the sharp rise in prices is making it harder for many Brazilians to buy, pushing more people into renting. Housing loans now make up more than 10% of Brazil's total economy, showing just how important this sector is.

These trends matter because they affect who can afford to buy a home and how the market will develop in the future. Understanding these changes helps buyers, investors, and policymakers make better decisions in a fast-changing market.

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