More warning signs for the residential property sector

Overview

Residential property prices in Sao Paulo and Rio de Janeiro have skyrocketed in the past three and a half years, fuelling fears of a real estate bubble in Brazil’s still-nascent housing sector. Although recent speculative activity and some over-saturated segments in certain markets bear close watching, our view is that Brazil’s overall property market is not yet suffering from over-exuberance, for a variety of structural reasons. However the pace of price increases may cool over the...