Brazil is at the end of a cycle
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Economic growth is slowing. Inflation is high. The wider global environment is not encouraging, with Europe’s sovereign debt crisis worsening and Asia slowing. And house prices are now falling in Brazil, in real terms.
Brazil’s composite FIPEZAP house price index registered its lowest year-on-year nominal price rise since data became available, with 4.49% year-on-year (y-o-y) price rise in May 2015. This is well below the 7.6% y-o-y inflation rate for the same month, so housing values aren’t keeping pace with inflation. In real terms house prices fell 3.65%, after adjustment for inflation. Average price growth has been slowing down from 18.7% in 2012, 12.3% in 2013, down to 10.2% in 2014.
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