Brazil’s biggest bank denies property bubble

Prices have soared in cities such as Sao Paulo, rising 23 per cent per annum in the last five years. Indeed, compared to 2008, Savills notes that prices are now 127 per cent higher, while values have risen even further – by 189 per cent – in Rio.

In the first half of this year alone, according to FIPEZAP, values across the country have grown 6.1 per cent.

Nonetheless, Geraldo Soares, director of investor relationships at the Itaú Unibanc, has said that while the market is booming, the bank “does not believe that there is a property bubble in Brazil”.

“Housing credit is not leveraged, as was the case in the [pre-credit crunch] USA and so such a hypothesis would not be justified here,” he argued, dismissing suggestions that prices will fall in the coming years, but predicting that would continue to climb after a short period of “small accommodation”.

Source: Property Secrets