December 30, 2016 / 12:33 PM / in 2 years

Brazil home prices up 1 pct in Q4 despite recession - VivaReal

SAO PAULO, Dec 30 (Reuters) - Brazilian home prices rose 1 percent in the fourth quarter from a year ago, indicating a more positive outlook for homebuilders despite a harsh recession, according to a survey compiled by VivaReal, an online classifieds company.

Despite the rise, the price of a square meter was the lowest for any quarter this year, averaging 4,846 reais ($1,489.61), a sign that unemployment and high borrowing costs continued to discourage potential home buyers, the data showed.

Brazil’s worst recession in decades has led to record cancellations of home sales, a reduction in new developments and in some homebuilders filing for bankruptcy protection.

Cheap rents are also keeping a lid on demand for real estate. In the fourth quarter, residential leases slumped 8.3 percent in annual terms, reaching the lowest level since VivaReal started keeping records three years ago.

“Rent values will only go up once expectations point to an improvement in the economy,” Lucas Vargas, VivaReal’s chief executive, told Reuters in an interview on Thursday.

Brazil’s depressed homebuilding market could see the start of an upswing next year as developers regain confidence, Vargas said, citing recent discussions with the companies.

For the first time in almost a year, developers have been procuring consultants to gauge home buyers’ demand, a sign they may accelerate product launches some time in the second half of 2017, he said.

The VivaReal data is based on 2 million online ads from 30 Brazilian cities including Brasília, Rio de Janeiro and São Paulo, where home prices are the highest in the country.

$1 = 3.2532 reais Reporting by Alberto Alerigi; Writing by Ana Mano; Editing by Bernadette Baum

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