The real estate market in Bahia accumulates the largest inventory of units in its history. There is a whopping 18,000 new homes ready or under construction up for grabs. The excess of supply has never been greater.

The Directors’ Association of the Real Estate Market in Bahia (Ademi-BA) has recommended caution to its developers when launching new buildings. In private meetings among the sector’s members, the message is to “slowdown to avoid a sharp correction in property prices”. To avoid an excessive increase in inventory, the developers are being advised to improve their project planning processes with the use of accurate supply/demand studies before launching properties.

In a market that has always shown a discipline in the balancing of supply and demand, such a high inventory of properties caught experts by surprise. The euphoria of buyers with greater access to credit is now cooling down as property prices shot up due to inflation costs and low productivity.

But the problem is not specific to Bahia. Other states, like Sao Paulo, also suffer from a slowdown in property sales and a growing inventory of new homes. The question now is whether the common law will prevail in the market, causing the fall of property prices in the face of a greater supply than demand.  

Who dares to answer?
Reference: Bahia Noticias
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