Today we have stumbled upon a print article (below) from newspaper “O Globo” that seems to clearly demonstrate the desperation that has taken the body and soul of many real estate agents in Brazil.

As you might already know, since 2006 the real estate mortgage market in Brazil increased seven fold, the volume of project launches soared 310% and the number of financed homes in Brazil is at record highs (more than 1 million units last year alone). But the party may have ended, as anecdote evidence suggests.

Homebuilders all over Brazil saw their net profits fall by 12% in 2011, while their debt levels rose 68%. One of them, Lider, has even filed for Chapter 11. Some others are promoting inventory liquidation and sales events like there is no tomorrow. Many buyers are still in denial mode, but the fact is that prices in Rio and Sao Paulo started a mild correction trend.

The “O Globo” article below quoted real estate brokerage Fator Realty’s Paulo Fabbriani saying the following:

“We [real estate developers and brokers] have all the conditions to absorb another 15 years of strong growth. This housing price appreciation is not a bubble as many are saying. Today, the demand is five times higher the supply of properties. There are many more buyers than sellers. Obviously, prices will keep going up.”¬†

Do you buy it?
Bolha Brazil


And for those who don’t know how people behave during a bubble mania, here is a chart that can help:

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