“Just before the World Cup and the Presidential elections, everything ground to a halt,” explains Frédéric Cockenpot, the young Belgian founder of the WhereInRio, which specializes in the luxury property sector. “Both sellers and buyers started to play a waiting game. Everybody was asking themselves what would happen after the ‘Copa’ was over, and how the October 2014 elections would go in an atmosphere of tension generated by street protests. The market started to flat-line with seemingly no light at the end of the tunnel.”
This year, though, Cockenpot says that the market has began to shake off its lethargy, with a rise in foreign interest encourage sellers to list their properties, prompting a glut of supply.
As a result, prices have fallen by 20 to 30 per cent, which “looks unlikely to be reversed in the short-term.” At the same time, the collapse of the real against the euro has naturally helped French and European buyers over the past few months.
“These two simultaneous phenomena mean that 2015 will be a pivotal year between the World Cup and the August 2016 Olympic Games, an ideal window of opportunity for potential buyers,” says Cockenpot.
He reports that enquiries from foreign individuals have been on the up since the beginning of the year and downplays fears of a possible bubble: Brazilian banks will lend no more than 70 to 80 per cent of the value of a property, so mortgage lending as a percentage of GDP should only be around 10 per cent in the years to come, as opposed to up to 80 per cent in the USA. Unemployment remains very low and the job market is far from saturated.
“There are good economic times ahead of us – perhaps not as good as in previous years, but growth is likely to be healthy – and much more sustainable,” he adds.