Despite this, the number is still significant, which shows that the sector is crucial for the real estate market. (Image: Canva Pro)
Higher interest rates, increased bank financing costs, and funding issues have been the perfect formula to inhibit real estate purchases, especially by the middle class. If in the second quarter of 2023 the mid-range market was responsible for 60% of the Global Launched Value (VGL), this year it fell and became 50% of the total. Despite this, the number is still significant, which shows that the sector is crucial for the real estate market.
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The numbers were presented in a survey carried out by A branch (Brazilian Association of Real Estate Developers) and Brain Strategic Intelligence, which also showed that the high-end market was responsible for 26%, while the other 24% of the My Home, My Life (MCMV), in the second quarter of 2024.
“The middle class is interested in buying real estate, but finds it difficult to obtain credit due to high interest rates and the high cost of funding. This not only compromises the budget of families, who face obstacles in financing their own homes, but also inhibits the launch of new projects by developers, affecting the entire sector,” says Luiz França, president of Abrainc.
According to the data shown by the survey, 48% of the general respondents intend to purchase, with the lowest level being found precisely in the income range between R$10 and R$20 thousand, with 40% of intention.
Real estate market and high Selic rate
It is worth remembering that the Monetary Policy Committee (Copom) announced last Wednesday (18) an increase in the rate, Selicof 10.50% to 10.75% per year. According to França, the high rate “has a negative effect on borrowers in all sectors of the economy, making loans and financing more expensive”.
Although in the minutes released this Tuesday (24) Copom members do not commit to future strategies, the market is already pricing in further increases on the horizon.
Economists consulted by Banco Central raised the stakes to Selic by the end of this year, to 11.50%, according to the Focus Bulletin this Monday (23). The estimates for 2025, 2026 and 2027 remained stable and interest rates are expected at levels of 10.50%, 9.50% and 9%, respectively.