Low-interest rates spur demand for high-end properties in São Paulo

Amid the worst economic crisis in Brazil’s history and corruption scandals that interrupted infrastructure works in Brazil, the construction sector saw itself throttled by a lack of demand for residential and commercial properties and a scarcity of public building contracts. But although the sector’s overall situation remains bleak, one segment is blossoming: luxury residential properties.

According to Abrainc, Brazil’s property developers association, in the past 12 months there was a 20.2 percent increase in new medium and high-end residential properties. Net sales—the balance between sales closed and deals agreed—increased 17.2 percent in the same period.

In São Paulo, the largest real estate market and the second most expensive place to buy a property in Brazil after Rio de Janeiro—3,020 medium and high-income units were launched in 2019’s first quarter, 89 percent more than Q1 2018, according to Secovi, a Brazilian of association real estate companies.

The steep decline of interest rates in the country is among the reasons for the performance. The Selic benchmark interest rate is at...