Striking information about housing affordability has come out of one of Brazil’s leading research agencies, the IBGE (Brazilian Institute of Geography and Statistics), based on surveys in line with the current 10-yearly census and national household budget survey:
- 17.9% of households have great difficulty paying their commitments at the end of the month;
- 21.4% have difficulty;
- 35.9% have some difficulty;
- 14.3% find it reasonably easy;
- 9.5% find it easy; and
- 1% find it very easy.
Of families who have 'great difficulty', 64.2% receive up to 3 times the minimum wage in monthly family income (R$1,395). Of families with incomes between 3 and 6 times the monthly minimum wage (R$1,395 to R$2,790), 24.2% indicated 'great difficulty'. Of households in the top 15% of incomes, 2.1% reported 'great difficulty'.
As the property market's inexorable growth continues, this finding highlights concerns about the potential disequilibrium between house prices and incomes.
Yet at the same time, it cannot be denied that Brazil's economic growth is producing a rising middle class, higher wages and falling unemployment (the IBGE statistics also show joblessness at an 8-year low).
Nevertheless a vigilant eye should be kept, in view of the survey results, on the question of affordability, and on whether Brazil's house price rises are still in line with reality.