(MENAFN- The Rio Times) For a few years, São Paulo's hottest real-estate bet was the tiny“non-residential” studio marketed as a turnkey Airbnb machine.

Between 2019 and 2024, developers launched 16,676 of these NR units, with annual volumes topping 3,000 in 2021.

By October this year, new launches had collapsed to about 540, and the model that promised easy yield and flexible use is being quietly retired.

The reasons mix higher rates, legal overhauls and growing political distrust of investors.

On the macro side, Brazil's benchmark interest rate surged from pandemic-era lows of around 2% to the mid-teens, making fixed-income products suddenly more appealing than leveraged short-stay property plays.

That hit demand from small landlords who had flocked to NRs as an income tool.

At city level, the new Master Plan and zoning review removed a crucial incentive. Until 2024, developers who included NRs could build up to 20% more floor area without paying the outorga onerosa fee.

Now they must pay for that extra potential, pushing up costs in high-end projects while leaving social housing, with regulated prices and financing, largely shielded.


Airbnb-Style Micro-Apartments Lose Their Shine In São Paulo's Property Boom
The change narrows the commercial logic of mixing large NR slices into towers in neighborhoods such as Vila Mariana, Butantã, Pinheiros, Vila Clementino and Perdizes.

Regulatory pressure has also intensified. Court rulings increasingly treat high-turnover short-term rentals as non-residential use, and national lawmakers are debating tighter rules for seasonal lets in residential buildings.

In São Paulo, a city inquiry into abuses in social-housing programs has put a spotlight on units that were meant for low-income families but ended up in investors' hands, often tied to short-stay platforms.

Developers have responded by tightening sales filters and steering away from formats that could be seen as speculative loopholes.

The market is not shrinking, just changing shape. Many new luxury and upper-middle projects are“pure-blood” residential, with compact apartments sold for classic long-term rental.

Where NR space remains, builders are reallocating it to offices, ground-floor malls or gyms.

Projects like Visar, with a gross sales value of about R$ 550 million ($102 million), and Union Braz Leme at roughly R$ 130 million ($24 million), channel NR potential into corporate floors or retail.

Natus Braz Leme, delivered this year, turned its NR portion into a small shopping area, while the city's gym chains expand aggressively into these ground-floor spaces.

For investors and residents, the message is clear: São Paulo is nudging the pendulum away from quick-turnover speculation and toward more conventional housing and service uses.

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