The resumption of the real estate market is evident. Recent survey data assumes that industry sales are growing steadily. Another novelty is the equivalence of prices between the two most popular types of property categories. New and used.
Several factors influenced this conclusion, based on a FipeZap survey. Do you want to know more about the two types of properties and how the market presents optimal conditions for investments?
In this text you will learn:
-? The behaviors of both in recent years -? Price equivalence data -? How do market strategies influence the price
-? The ideal time for investments
Different Behaviors – The crisis of years ago reflects on the price of real estate today
Buying or selling real estate has become simpler over the years. According to perspectives from the Department of Economy and Statistics at Segovia – SP, between June 2018 and June 2019, there was a 176% increase in the total number of new homes sold.
This data alone illustrates the expectation for the rest of 2019. This recovery is a victory for the real estate sector, which, since 2008, has suffered from the price of houses and apartments. All thanks to the famous economic crisis that spread to various sectors of the national economy.
However, the behavior of the market has changed. If in 2008 the situation was chaotic, in 2014 the value per square meter of real estate began to take on a different pattern.
While the square meter of new properties became cheaper and cheaper, the square meter of used properties became a little more expensive. The result was that the price difference, which used to exist between these two categories of properties, has practically disappeared.
Market Data – How Prices Become Equivalent
All this behavior can be illustrated in data. According to a survey carried out by Group Zap itself – owner of the Zap and Viva Real estate advertising sites – the behavior of the properties was the opposite.
Between 2014 and 2019, the average value per square meter of used properties rose by approximately 12.2%. While the average square meter value of new properties – those sold directly by construction companies – remained down 20.2%.
To give you an idea, the average difference between the square meter of a new property and a used one, in 2014, was 33%. This equates to a price of 11,838 reais for the square meter of new property and 7,922 reais for the used one.
As early as 2019, this difference in the average price per square meter dropped to 6%. In other words, new property had its price per square meter reduced to 9,451 reais, while the square meter of used property rose to 8,888 reais.
All this, of course, taking into account the average prices charged in the first half of each year. This record, although exclusive to São Paulo, does not fail to reflect a trend for other urban centers.
Market Logistics – Sales inventory and different strategies
Market logistics and external factors are one of the decisive patterns for this change to take place in the real estate sector. This logic can be understood as targeting.
In the case of new projects, construction companies work with hundreds of properties. All are new, units designed to offer different types of patterns and concepts. A real estate market for the end customer to make their purchases.
Also, the sale frequency of construction companies is different compared to that of used property owners. Several sales take place at the same time, which brings these builders closer to economic trends.
In other words, if the demand for real estate falls, the number of real estate runs aground. If there are more apartments or houses than what they sell, prices fall. Already in used ones, usually the person’s stock is just the property he owns.
Therefore, the owner of a house simply does not lower the price because it is difficult to sell. Often the ad stays on for two or three years until the person who buys it appears. In many cases, the property owner still withdraws the product from the market.
The price difference between the two, precisely because of these market details, practically disappeared from 2014 to 2019. Today, whoever buys a used apartment or house may end up paying more than a new property. Even with similar characteristics, such as footage, location, rooms or parking spaces.
Time to invest! – Proper time to complete your plans
This is definitely a good time for investments. Of course, these investments should be based on your needs. Regardless of whether you purchase a used or new property.
The trend is for new properties to remain at lower prices for a while. Even with prices falling relatively quickly, it doesn’t mean they will now appreciate.
The same is true for used properties. The tendency is for them to be acquired for possible resale, which can represent a good deal. Second-hand prices are expected to recover faster due to “out of stock”.
The bottom line is: Home prices are low and there are plenty of options on the market, both new and used, at equivalent prices. Therefore, this is the perfect time to get back to investing in the sector or to resume the postponed plans for acquiring your dream property.