5 data that show how rich Brazilians are doing well through the pandemic

They represent about 2% of the Brazilian population, but their expenses are equivalent to almost 20% of national consumption.

In the midst of the pandemic, while most of the country suffered from loss of income, amid the advance of unemployment and inflation, the richest Brazilians found themselves prevented from spending on international travel and shopping in the main consumption capitals of the world.

With “savings forced” by changing habits, they spent on luxuries in the domestic market and invested a record volume of money abroad.

So, while part of the population queued to receive bones at the butcher shop, amid record meat prices and the advance of hunger, another portion — much smaller — was waiting in line to buy a helicopter.

According to a manufacturer interviewed by BBC News Brazil, the wait for a new aircraft reached 20 months, depending on the model, amid a jump in demand.

Luxury car maker Porsche set sales records in the country in 2020 and 2021, while the luxury and super luxury real estate sector – from apartments above BRL 1 million and BRL 2 million, respectively – recorded growth of more than 80% on launches and 47% on sales.

Check out these and other data that show how the “upstairs” is doing very well through the pandemic.

2% of the population, 20% of consumption

According to market research firm Euromonitor, the so-called Brazilian “class A” represented 2% of the population in 2021.

These are people with an annual family income above US$ 45,000 (R$ 248,000 per year or around R$ 21,000 per month, at the current exchange rate), whose spending was equivalent to 19.4% of national consumption last year.

Although the A class has declined after two years of the pandemic (it represented 2.7% of the population in 2019, according to Euromonitor), the consumption of this higher income segment was much less affected by the health crisis than the rest of the population.

“Wealthy consumers have accumulated important involuntary reservations due to reduced leisure options and social limitations imposed by the pandemic”, observes Guilherme Machado, research manager at Euromonitor International.

“Most Brazilians in these higher income groups are used to traveling abroad and buying luxury items in the main global centers of consumption, such as New York, Paris and London. But, with the closing of borders, these consumers have been looking for pleasure in the local luxury market, resulting in unprecedented levels of revenue for some luxury brands”, highlights the researcher.

Porsche breaks sales record in Brazil in 2020 and 2021.

One of these brands was Porsche. While overall passenger car sales in Brazil plunged 28% in 2020 and dropped another 3.6% in 2021, amid production stoppages caused by a global semiconductor shortage, the luxury brand has set sales records in the country. in the two years of the pandemic.

Buyers have faced queues longer than the three to six months normally required to customize cars that are synonymous with ostentation.

“In 2021, we sold 3,079 vehicles here in Brazil, a growth of 24% compared to 2020, when we had sold 2,487 units”, says Leandro Rodrigues, communications and public relations manager for Porsche in Brazil.

“2020 was our previous record, we broke records in 2020 and 2021”, he highlights, noting that the company started operating directly in Brazil in 2015 and has grown at an average of 27% per year since then. The upward trajectory was not shaken by the pandemic.

“When you have customers who had a large share of consumption abroad and suddenly that consumption doesn’t happen, naturally they have resources available to buy products here in Brazil”, evaluates Rodrigues.

The executive also highlights the restrictions on leisure options even within the country as another factor that explains the boost in sales.

“Naturally, some customers looked for other ways to keep themselves entertained and fulfill their dreams and desires. These are factors that help explain this demand”, concludes the executive.

Consumers were not even shaken by the effect of the exchange rate on the price of cars. With a factory in Germany, Porsche’s operation in Brazil was impacted by the 40% appreciation of the euro against the real since the period before the pandemic.

“Part of this increase had to be passed on to prices,” says the spokesman. The Porsche 911, the automaker’s best-selling model, has values ​​ranging from BRL 800,000 to more than BRL 1 million.

Waiting to buy helicopters reaches 20 months

Amid a surge in demand, the Brazilian market for helicopters and executive jets saw the waiting list for products reach up to 20 months during the pandemic.

“The market had been dammed for a while due to Brazilian economic problems. With the advent of Covid and the lockdown, there was a greater demand, especially in helicopters in the VIP area and what we call ‘for the public’, such as police and firefighters”, says Rubens Cortellazzo, sales manager for Italian manufacturer Leonardo Helicopters.

“VIP area are civil operators, such as large companies, businessmen and air taxi”, explains the executive, about the meaning in the helicopter market of the acronym which in English means “very important person”. .

According to Cortellazzo, sales to the private sector were driven by the fear of contagion and the reduction in the offer of commercial flights during the pandemic.

According to the executive, the Brazilian civil market for medium-sized single-engine and twin-engine helicopters grew 26% in number of deliveries in 2021, compared to 2020.

“Many customers were left with dammed resources. With the restriction of international travel and the fear of the pandemic, there was more appetite to invest in equipment to use in the local market”, says the manager.

“The wait for purchase, which was 12 months before, reached 15 or 16 months, depending on the model. There are models in which we are already talking about 20 months of waiting.”

Cortellazzo says buyers use the helicopters primarily for work.

“We joke that the helicopter is a ‘time machine’. You save a lot of time traveling from one meeting to another, from São Paulo to the countryside, from one capital to another. So the helicopter is a very interesting tool for these entrepreneurs.”

Leonardo’s entry-level aircraft (that is, its most basic model), called the AW119 Koala, has an average price of 4.3 million euros (about R$27 million).

For the VIP market, which includes medium-sized aircraft, the value can reach 15 million euros (approximately R$94 million).

Luxury real estate market grows 81% in launches

Sales of luxury and super luxury apartments hit a record in the first nine months of 2021.

These are developments with three or four suites, ample footage over 100 m², generous windows and ceiling heights and a large number of parking spaces.

In January and September of last year, launches in this market reached 7,600 units, an increase of 81% compared to the same period in 2020. In the Brazilian real estate market in general, launches grew 30% on the same basis of comparison.

In sales, the growth of the luxury and super luxury market was 47% in the first nine months of 2021, with more than 10 thousand units sold, exceeding R$ 15.4 billion in general sales value, according to data from Brain Intelligence Strategic , consultancy specializing in the real estate market.

For Marcos Kahtalian, founding partner of Brain, one of the factors that boosted sales in the high-end real estate market in the recent period was the low interest rate — the Selic (the basic rate, determined by the Central Bank) started 2021 in 2 %, lowest percentage in history.

“This injected a lot of liquidity into the market and attracted funds to the real estate sector, as other investments had very low returns”, says Kahtalian.

“Another factor was behavioral: due to the pandemic, there was an intense search – for those people who had income, of course – for bigger, wider, more comfortable housing, both in capitals and outside them. There was a movement in search of space and quality”, observes the consultant.

São Paulo and Rio de Janeiro are the two main markets for luxury developments, with emphasis on neighborhoods such as Jardins, Vila Nova Conceição and Moema in the capital of São Paulo and Zona Sul and Barra da Tijuca in the metropolis of Rio de Janeiro.

In the cities of the interior, the search for horizontal developments stands out, such as condominiums of lots or closed condominiums of high-end houses.

In 2022, high interest rates may slow down this market a little, believes Kahtalian.

“For the luxury market, high interest rates make less difference than for the middle class, but it makes some difference”, says the consultant.

“It makes less difference because normally the buyer does not finance the property, or finances little. But it makes some difference because there is an attractiveness for the capital to be invested in another way”, he says, citing as an example fixed income investments, such as government bonds, that have low risk and become more interesting with the Selic close to 10%.

Also this year, due to the recent sharp rise in prices in the real estate market, the definition of luxury and super luxury should be revised, rising to projects starting at R$1.5 million and R$3 million, respectively.

“The luxury and super luxury market is not very representative in terms of units — about 7% of the total in the last nine months. But it is about 33% of the value launched and 40% of the total value sold. less volume, but of great value”, says the Brain partner.

Brazilian financial investment abroad is record

Finally, one last piece of data that shows how the so-called upstairs went through the pandemic with ease comes from the financial market.

According to data from the Central Bank, Brazilian financial investment abroad exceeded US$ 18 billion (R$ 100 billion) between January and November last year, up 76% over the same period in 2020 and a record in the historical series started in 1995.

According to Claudia Yoshinaga, coordinator of the Center for Studies in Finance at FGV (Fundação Getulio Vargas), this is due to the current greater ease of investing in international products and the recent strong rise of the dollar against the real, which leads investors to seek security of having part of your money outside the risks of the Brazilian economy.

“This type of investment became popular in some way, it came out of that ‘private’ customer with millions of reais. But it is still not a product that any Brazilian has, we are talking about the richest layers, of a high-income retail segment”, says the teacher.

“It is an audience that has the dollar as an important currency in their daily lives, in vacation trips or consumption habits linked to the dollar, such as luxury items and wines. So, for these people, having a part of their investment in hard currency helps, as a way to diversify and protect against price rises,” notes the finance expert.

“These are people who mostly did not lose income in the pandemic and reduced their expenses, because they spend a lot on restaurants, entertainment and vacation trips abroad. With the distance, these people were able to save more money.”

For Yoshinaga, despite the rise in the dollar making investments abroad more expensive and the rise in interest rates in Brazil making local investments more attractive, the volatility of the election year should continue to encourage Brazilians to seek investments abroad, as a way to reduce its dependence on what happens in the national economy.