Brazil faces a 'perfect storm', now that its great housing boom is over
Brazil´s economy remains depressed. Inflation continues to rise. Unemployment is at record high. Consumer confidence has plunged. Banks are now refraining from offering credit. And house prices continue to fall in Brazil, particularly in real terms.
Brazil’s composite FIPEZAP house price index dropped0.7% during the year to August 2016, itsseventh consecutive month of year-on-year nominal price falls. This is in sharp contrast with the 8.97% y-o-y inflation rate, so housing values aren’t keeping pace with inflation. When adjusted for inflation, nationwide house prices actually fell by 8.85% during the year to August 2016. Average nominal price growth has been slowing from 26.3% in 2011, 13.7% in 2012, 12.7% in 2013, and 6.8% in 2014, and down to 0.85% in 2015.
