Brazil Real-Estate Bubble Not Popping, Home Values Level Off

Brazil’s so-called housing bubble is expected to lose pressure as prices even out in the country, according to a Bloomberg report.

Home prices are soaring again by “one-third as fast” as the rate in 2011, as developers start to sell homes ready for turn-over this year for lower prices, the report said using data from FIPE and Zap Imoveis.

As a result, short term investors have started to leave the market as they look elsewhere for “other opportunities” with larger gains.

“We’re seeing an excess of new home deliveries, so the market is adjusting,” Rossi Chief Executive Officer Leonardo Diniz told Bloomberg.

The “clearance sale” of low-return properties “should boost cash flow, paving the way for sales of more profitable homes,” Dinis said in the report.

The uptrend is favorable for home buyers and developers especially at a time that the government announced the country is in an economic crunch for the first half of the year.

Robert Shiller, Nobel prize-winning economist and half of the creator of the Case/Shiller home price indices noted early last year that the rapid increase in home prices in Rio de Janeiro and Sao Paulo in the past five years was akin to what was happening to U.S. real estate before it crashed. 

“What could account for that other than excitement?” Shiller was quoted as saying by Bloomberg. “I was saying these things in the U.S. during the bubble.”

But interest rates then had been soaring since April, which in turn, helped slowed price increases to just 0.64 percent monthly, compared with 2.3 percent during the same period a year ago. 

The absence of speculative, short term investors, easy loan access, and combined with “unmet” housing demand will soften prices longer for the benefit of buyers, added Cyrela Chief Financial Officer Eric Alencar in the report.

In the meantime, as real estate investors looking for high-value and high-return investments await Brazil’s property market rebound, these investors can turn to markets like that of the United States where foreigners are snapping up properties in a frenzy. One technology that American real estate agents can use to lure these investors in are virtual tours.

Realbiz Media Group, Inc. RBIZ develops proprietary video marketing software that agents and their brokers can use to promote their virtual tour listings online. The company offers a Virtual Tour Program that allows real estate sellers to create virtual tours and presentations that are optimized for mobile viewing and could be syndicated through social media for only $29.95 a month.

The program is equipped with a video search engine optimization (VSEO) tool that automatically generate meta tags and descriptions for virtual tours and listings agents have uploaded to the platform so that they would be found easily by consumers online.

The program also has tools for creating QR codes, e-flyers, and seller reports as bonus features.

To learn more about Realbiz Media and its products, contact sales@realbizmediagroup.comor call 1.888.REAL.BIZ (888.732.5249).