Real Estate in ES Yields More Than Traditional Investments in Ten Years

Research takes into account properties launched in 2012 in the cities of Vitória and Vila Velha Ademi-ES has just released the 2nd edition of the research "Performance of the Capixaba Real Estate Market in 10 Years," which provides an analysis of the sector's behavior from 2012 to 2022. According to the survey, which was supported by Brain Inteligência Estratégica, the segment remained resilient in the face of adverse economic scenarios, including political and institutional crises, the pandemic, as well as unemployment, inflation, and rising interest rates (Selic). The cycle analyzed by the institution indicated a Property Yield (RI) higher than traditional economic indicators, recording an RI of 149.51%, compared to CDI (123.18%), Ibovespa (85.83%), and IPCA (84.08%). The yield is calculated considering property appreciation, plus a rental return rate. The rental rate was calculated based on a return of 0.35% per month and a vacancy rate of 10%. The research "Performance of the Capixaba Real Estate Market in 10 Years" analyzed residential properties in the types of 1, 2, 3, and 4 bedrooms, of medium and high standards, launched in the base year of 2012 in Vitória and Vila Velha. The cities of Serra and Cariacica were not included in this survey due to the reduced volume of launches in the base year of the research. The same parameter applies, separately, to the economic segment. The neighborhoods surveyed in Vitória were Praia do Canto, which recorded the highest Property Appreciation (VI) among the locations evaluated in the city, noting 128.01%, followed by Barro Vermelho (123.90%), Jardim Camburi (95.36%), and Bento Ferreira (79.44%). In Vila Velha, the survey indicates a VI of 144.60% for units located in Itapoã and 134.53% in Praia da Costa, as well as 117.55% in Itaparica. In practice, a four-bedroom property in Praia do Canto had an initial selling price of R$ 900,000 in 2012. Today, the same property is valued at R$ 2,052,090. In the case of Vila Velha, a three-bedroom unit in Itapoã was sold for R$ 386,000 in 2012 and currently has a market value of R$ 944,156 for ready properties. According to the analysis by Brain Inteligência Estratégica, the good performance of the sector is due to numerous factors, the most relevant being the risk-return relationship. "Real estate is one of the safest assets to invest in the world, with high returns but low risk. In scenarios of economic instability, investing in real estate preserves and increases wealth, while other financial assets fluctuate with retraction or real money loss. In fact, real estate constitutes the largest asset class in the world. There are over 330 trillion dollars, including residential, agricultural (farms and sites), and commercial (offices, stores, warehouses, shopping centers, hotels) properties," highlights Fábio Tadeu Araújo, CEO of Brain Inteligência Estratégica. Favorable scenario for investing in the real estate market For Eduardo Fontes, president of Ademi-ES, despite the constant increases in the Selic rate, currently set at 13.75% by COPOM, the current moment of the Brazilian economy, including the Capixaba economy, continues to support the real estate market's discourse: this is a good time to buy a property. The first factor to consider is that the interest rate for housing financing did not follow the successive corrections of the Selic rate, which rose from 2% per year in March 2021 to the current 13.75%. During the same period, the average rate of real estate financing jumped from 6.9% to 9.2%. This percentage is still below the average observed in equally turbulent periods of the national economy. The second is related to the law of supply and demand. The current level of production of new developments is at a level comparable to 2006. Today, the stock represents around 25% of what is being produced, meaning the market is already experiencing a supply cycle below the consumption appetite of the population in some prime and consolidated regions of the cities of Vitória and Vila Velha. "Although there is a continuous appreciation of properties, the estimate is that new launches will reach the market with updated prices, following the inflation of construction and planning costs. Therefore, we currently have a window of opportunity for those who wish to acquire properties for housing or investment under more advantageous conditions," concludes Eduardo Fontes, president of Ademi-ES.