Brazil Housing Prices Rise Much Less Than Inflation in 1st Half 2015

Brazil Housing Prices Rise Much Less Than Inflation in 1st Half 2015

The FINANCIAL -- House prices in Brazil rose much less than inflation in the first half of the year, as the country's poor economic performance damaged consumer confidence, according to Nasdaq.

House prices rose 1.38% in the first six months of 2015, according to FipeZap, an index of home prices produced by a think tank affiliated with the Sao Paulo state university. By comparison, Brazil inflation increased at a projected rate of 6.10% in the first half.

In the first half of 2015 versus the year-earlier period, housing prices picked up 4.52% while inflation increased 8.8%.

The country's statistics bureau, the IBGE, will publish inflation figures for June--and for the first half and 12 months period--in the next week.

The average price per square meter in Brazil ended May at 7,608 Brazilian reais ($2.454).

After house prices in the most desirable neighborhoods of Rio de Janeiro and Sao Paulo had doubled from 2008 to 2013, according to FipeZap, more recently real-estate prices in the country lost ground due to the sluggish economy and high inflation and interest rates.

Brazil's economy is expected to contract around 1.4% this year, according to economists surveyed by the country's central bank, while the central bank is expected to further increase its base rate, currently at 13.75%, to combat inflationary pressures.