Average price per square meter drops in SP; see variation by district

After the increase observed during the pandemic, the price of apartments in the city of São Paulo fell in 2022.

An analysis of 176,000 sales recorded by the city between January 2019 and May this year, based on data tabulated by Loft Dados, the core of the real estate startup Loft, shows that the value of properties dropped by 5.5%.

In figures adjusted for inflation, new owners paid an average of R$4,598 per square meter in the first five months of 2022, compared to R$4,865 in the same period last year.

In relation to the previous year (R$ 4,915), the reduction was 6.4%.

In comparison with 2021, the real value of apartments traded this year was lower in the five zones of the capital and in 80 of the 92 districts with sales made until May.

In the first year of the Covid-19 pandemic, the scenario had been the opposite, with an increase in the square meter in 60 of 93 administrative areas with business registered in the same months.

When only the districts with at least 50 properties sold by May this year were selected – to avoid distortions due to very small samples – there was a retraction in prices in 69 out of 74 regions analyzed.

Among these, the biggest reduction occurred in Jaraguá (-15.2%), where the average price fell from R$ 3,314 last year to R$ 2,811, in deflated values.

Then appear Capão Redondo, Cachoeirinha, Mandaqui and Artur Alvim, with variations between -12.9% and -11.6%.

The slowdown was also observed in some of the most valued regions of the city. In Moema, for example, the reduction was from R$7,889 to R$7,539 per square meter, equivalent to -4.4%.

Consolação (-3.6%), Vila Mariana (-2.9%), Jardim Paulista (-2.6%) and Pinheiros (-2.3%) are also part of this list.

See below for the variation by district:

For experts, the data reflect a slowdown after the housing boom observed in the pandemic, in addition to changes in the composition of demand and supply.

“We notice this drop, a trend towards a slightly more reduced demand. This slowdown causes prices to decrease to try to accommodate the market”, says Rodger Campos, data manager at Loft.

Campos classifies the behavior of the sector after the arrival of Covid as atypical.

“Prices fell due to the uncertainty inherent to the crisis. But soon there was a super-fast recovery, very much associated with asset protection, with the search for a low volatility asset. And also the search for new types of housing in the context of the pandemic “, remember.

Demand at that time had been driven by low inflation and the historic low of the basic interest rate, the Selic, which reached 2% between August 2020 and March 2021.

“It was, by far, the period with the best performance in the Brazilian market, with the largest volume of credit granting in the history of real estate financing. An absolute record”, says Marcos Kahtalian, partner at Brain Intelligence Strategic Consulting.

He highlights, on the other hand, that the contractors had increases in expenses. The INCC (Market Construction Cost Index) recorded an increase of 13.8% in the last year.

“With families at home, without traveling, with restricted consumption and new needs, such as space for the home office, liquidity was very directed to the real estate market. These factors, together, caused prices to rise”, says Kahtalian.

Data from the city of São Paulo corroborate the boom in the sector. Between the second half of 2019 and the first half of 2020, marked by the arrival of Covid, the total number of apartments sold had dropped from 24,400 to 17,100. From then on, sales jumped to an average of 31,200 units in the following three semesters.

Crisis accentuated inequalities

Among the districts with the most units sold between July 2020 and December last year are some of those with the most expensive square meters in the capital, such as Itaim Bibi, Vila Mariana, Moema and Jardim Paulista.

“The crisis has the characteristic of accentuating inequalities. Those who took advantage of this boom the most, who were well positioned to take advantage of the interest rate, were the people with the highest income, in the range of ten minimum wages or more”, says economist Pedro Tenório , from DataZAP+, based on data from the Central Bank regarding the Credit Portfolio Balance.

He points out that some of the most valued regions of the city are also among those with the highest concentration of buildings and, consequently, of units for sale.

Regarding the variation in prices observed this year, Tenório believes that there has been a change in the composition of the offer, not a real devaluation of the apartments.

“Actually, if we compared the same property before and after, it would not have lost price. The data suggest that the drop in average results from a change in the basket, with the search for cheaper properties, and not a loss in the fundamental price of the real estate asset itself”, he explains.

With the spike in inflation and the increase in the Selic, currently at 13.25%, experts predict a result closer to pre-pandemic for 2022.

“We see the effect of inflation eroding purchasing power and a slowdown in demand, with drops in real prices, throughout this context of macroeconomic conjuncture”, says Campos, from Loft.

“After the advance of vaccination [contra a Covid] and the resumption of sectors that employ relatively more and pay less, the composition of credit also changed, with a greater presence of the income bracket with between two and three minimum wages”, adds Tenório, from DataZap+.

The price analysis considered the data of 176,089 apartments sold in the city of São Paulo and registered between January 2019 and May of this year, cataloged by the city hall based on the Declaration of Real Estate Transactions (DTI) and the collection of ITBI (Imposto de Transmissão de Transmissão de Real Estate).

Only operations with full transfer of ownership were selected. The values ​​were updated by inflation until May according to the IPCA (Broad Consumer Price Index).

The geographical distribution of the properties was calculated from the address registered in the ITBI database and the official limits of the districts, made available by the Municipal Department of Urbanism.