Property prices in Brazil climbing steadily since start of 2013, latest index shows

Real estate prices in Brazil increased by 1.1% June, by 11.6% on an annual basis and are up 6.1% so far in 2013, according to the latest index from the Institute of Economic Research Foundation, the FIPRZAP.
The FIPEZAP index is the main indicator of the Brazilian real estate market and it looks at the property market across 16 regions of the country.
In June the average price per square metre was R$ 6.824 (US$ 3.045,07) with Rio de Janeiro commanding the highest prices.
In the state of Rio de Janeiro, real estate prices increased by 1.4% in June, higher than the expected official inflation rate, and in Sao Paulo there was an increase of 1.1% in prices.
According to Luke Smith, managing director of Crystal Investment and Real Estate Brazil is one of the fastest growing economies in the world and is South America’s property hotspot. Investors are attracted by low living costs and the lifestyle.
‘Brazil real estate is very attractive for a number of reasons. The primary one is the low cost of financing, or at least low by Brazilian standards. Mortgage rates are at least 1.3% a month, and loan payments are generally for just 15 years,’ he said.
‘Brazilians used to buy their homes in cash, but not today. Instead, they are financing purchases with deposits and mortgages. Since 2009, when Brazilians starting buying homes on debt, mortgage lending has risen five fold, by 550% between then and 2012,’ he explained.
‘However, Brazilian real estate is not in a bubble. Its banks do not trade in risky mortgage backed securities. What’s more, deposits are actually required, unlike in the US where subprime clients were able to get into a house with little or no deposit, leading to a foreclosure crisis,’ he added.