SAO PAULO, Jan 4 (Reuters) - Residential real estate prices in Brazil fell in nominal terms for the first time in at least a decade in 2017, a study by real estate group FipeZap showed on Thursday, highlighting continued risks in Brazil’s housing market.
The price fall was the first recorded since FipeZap began calculating its much-followed indicator 10 years ago. While real estate and homebuilding stocks in Brazil performed well in 2017 on the front edge of a consumer-led turnaround, the numbers indicate real estate demand in Latin America’s largest economy still has a way to go to recover.
According to the study, residential real estate prices fell 0.53 percent in nominal terms in 2017. Considering annual inflation of 2.78 percent, prices fell 3.23 percent in real terms, FipeZap said.
Residential markets performed much better in some cities than others. For instance, prices rose in nominal terms by 4.47 percent in the city of Belo Horizonte, but fell 4.45 percent in Rio de Janeiro, which has been hit by low oil prices, corruption scandal, and a state-level debt crisis.
Average residential real estate prices ended 2017 at 7.631 reais ($2.36) in Brazil, FipeZap said, with the highest prices registered in Brazil’s three largest cities, Rio de Janeiro, Sao Paulo, and Brasilia. ($1 = 3.24 reais) (Reporting by Gabriela Mello; Writing by Gram Slattery; Editing by Alison Williams)