Housing prices in Brazil have risen an average of 26% in 2011 alone, but the growth pace has been continuously falling since May. According to the FipeZap index (via Estadao), which tracks the square meter prices in seven cities in Brazil (São Paulo, Rio de Janeiro, Brasilia, Belo Horizonte, Recife, Salvador and Fortaleza), in December the month-to-month appreciation was 1.1%, the lowest of the year, after peaking at 2.7% in April.

Even the real estate professionals are now fearful
For FipeZap coordinator Eduardo Zylberstajn, a weaker economic activity helps explain the price movements.The slowdown in economic activity inhibited the Brazilians confidence, which has obviously reduced demand for property,” said Zylberstajn. The economist also pointed out that the upward movement in recent months had been so impressive that prices have reached out-of-touch affordability levels. Prices can go sideways for a few more months and stay relatively stable,” he says. Or there really may be a turning point and prices start going down.” 

Sao Paulo

In December, prices of residential properties in Sao Paulo had an average increase of 1.4%, the lowest rate since May 2010 and ended 2011 with an appreciation of 27%. The average price per square meter was R$ 6,066. Below are the most and least expensive areas in Sao Paulo (price per square meters, in Reais):

And below you will find the price movements since 2008:

Not a bubble yet?
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