Buying property is cheaper in Brazil compared to Latin America, but value still weighs on families’ pockets, says survey | Economy

Among 12 of the most populous cities in Latin America, Brazil has the municipalities with the lowest rents and sales pricesaccording to the survey “The residential market in Latin America”, released by QuintoAndar this Thursday (29).

The survey was carried out with ad data on digital platforms from August 2021 to July 2022 and investigated São Paulo, Rio de Janeiro, Brasília, Salvador, Belo Horizonte, Curitiba, Porto Alegre, Lima (Peru), Mexico City (Mexico), Buenos Aires (Argentina), Quito (Ecuador) and Panama City (Panama) .

Among the places surveyed, Buenos Aires is the most expensive city to buy or rent a property. For purchasethe square meter in the Argentine capital costs, on average, US$ 2.4 thousand. Mexico City (US$ 2.2 thousand) and Panama City (US$ 2.1 thousand) complete the podium.

In Brazil, Brasilia has the most expensive square meter, with US$ 1,800. then are Rio de Janeiro ($1,784) and Sao Paulo (US$1,725).

already among the rentsthe price per square meter in the Argentine capital is US$ 11.8. To put this in context: a 50-meter apartment costs, on average, $590 per month. Then there are Mexico City, with US$ 10.7, and Panama City, with US$ 10.5.

In terms of rents, Brazilian cities are slightly higher in the ranking. Sao Paulofor example, has the most expensive room rent ($8.6), above Lima (US$ 8.4), Quito (US$ 5.7) and Brasília (US$ 6.9).

According to QuintoAndar economist Vinicius Oike, the real estate market grew on the continent, with the exception of Argentina. The country suffers from high inflation, economic recession and an increasingly dollarized economy (transactions have used the dollar more and less the peso, the official currency of Argentina). In addition, the supply of houses and apartments is greater than the demand for them.

Specifically in Brazil, the credit increase (either via loans or programs such as Minha Casa, Minha Vida and Casa Verde Amarela) and a low real price increase (discounting inflation) in the last decade boosted the sector, according to the research.

Despite this market heating up, housing still shows a high level of income commitment in the analyzed cities. This means that the weight in the pocket of individuals and families is quite large – in some cases, greater than the 30% recommendation.

Of the 12 cities, only 3 can spend less than a third of their monthly income on rent. They are Curitiba, Porto Alegre and Rio de Janeiro.

For purchase, the situation is even more difficult. To measure the weight of the property price for families, the research calculated how many years this family would need to work to buy a house or apartment in each of the cities. The calculation takes into account the average price of real estate and the annual income of these people.

In 11 of the 12, the level obtained was considered alarming: it takes more than 7 to 10 years of work for families to realize the dream of their own home. The fact that most cities present this difficulty shows that access to housing is still a problem to be tackled in the region.

“The purchase commitment values ​​are quite similar and also indicate a low affordability. On the other hand, the rent values ​​point to a formal market detached from the average family income. In the case of Mexico City, there is a significant share of the market that serves foreigners, who typically have much higher incomes than the average local family”, explains the economist.

The prices used in the survey are the result of a conversion to dollars at purchasing power parity, which “adjusts different exchange rates to domestic fluctuations in the price level and allows for a more accurate comparison of the cost of living”, explains the company.

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