How Rising Interest Rates Are Impacting the Brazilian Real Estate Market

The Brazilian real estate market is currently facing significant challenges due to the recent increase in the Selic base interest rate, which has reached 14.25% per year. This sharp rise makes mortgage credit more expensive, limiting access to financing—especially for middle-class families who typically rely on loans to purchase property. As a result, many prospective buyers are postponing their homeownership plans or opting for more affordable alternatives.

At the same time, the rental market is experiencing renewed momentum. With financing becoming less accessible, demand for rentals has surged, putting upward pressure on prices. Over the past 12 months, residential rents in Brazil have increased by an average of 12.92%, outpacing the country’s official inflation rate.

Despite these challenges, the real estate sector remains resilient. In 2024, it grew by more than 20%, solidifying its position as a long-term investment option. Experts believe that, even amid adversity, the market will continue to expand—driven by consistent housing demand and ongoing property appreciation.

To navigate this scenario, it's essential for public policies to support access to housing and create a more balanced market. Initiatives that encourage the development of rental housing and offer more accessible financing solutions can help mitigate the negative effects of rising interest rates on the sector.

In short, while higher interest rates present a hurdle, a combination of smart strategies and supportive policies can sustain real estate growth in Brazil—meeting the country’s housing needs and maintaining investor confidence.

For a deeper dive into this topic, watch this analysis:
👉 High Interest Rates Are a Challenge for Real Estate | CNN Prime Time (in Portuguese)