“The euphoria that has taken over rental prices in Recife is over. In the Boa Viagem neighborhood where the housing market is the most sought after in the city, two-bedroom apartments, those most in demand, began to spend more time unused between one tenant and another. It’s not difficult to find units that are empty for four months in hopes of someone willing to pay the asking price. The rental signs have multiplied. The doormen of the buildings, the primary sources of information about the properties, reveal that the owners are more willing to talk about a less advantageous counter-offer. This does not mean, however, that renting in the neighborhood and surrounding areas is cheap. Boa Viagem is still expensive.
“A few months ago, the vacant apartments were rented for R$3,200, including property tax and a condo tax of R$420. Today there are owners that are ready to start the conversation at R$2,400 in the case of an unfurnished flat and R$2,700 if equipped with a bed, furniture, television, and basic things,” says Barbosa Grimauro, supervisor of the Morada Bela Vista Building, in Pina, a condo set in front of the RioMar shopping mall. The building, opened to residents four years ago, was strongly influenced by the proximity to the shopping center. During the construction of the mall, some owners were able to get up to R$4,000 per month, paid by the service providers of those building the mall.
The mall still makes the owner’s eyes light up. Some of them put a 75 square feet, three-bedroom apartment up for R$700,000. “They’re not selling,” says Barbosa. In all, seven apartments are for rent, some for more than four months.
Boa Viagem, however, is a “machine” made for producing residential buildings. In newer condos, dozens of owner-investors try to keep the market hot but with even higher offer prices. In the Golden Space Building, ready three months ago, at Rua Padre Bernardino Pessoa, one of the most disputed areas of the neighborhood, the doorman displays a group of two dozen apartments still unrented. He says that the owners want to rent them for R$3,000/mo. The 115 apartments at the address range from 35 to 50 square meters.
The market, however, seems to be in the investors’ favor. The latest figures from the Sales Velocity Index (IVV), measured by the Pernambucan Federation of Industries (Fiepe) show that buyer enthusiasm has cooled. In March, the index fell to 9.3 %, a decrease of 0.9 % compared to February and by 4.9 percentage points compared to March last year, when the IVV was 14.2 %. The index shows a percent based on how many of the apartments offered by contractors were sold. “2014 is different. We have the World Cup, election and unfavorable economic conditions, interest rates are increasing and people are more fearful,” explains Mariana Haack, Fiepe analyst.
Those who guarantee their income by renting property also admit that there have been better times.” I have three apartments to rent,” says engineer Luiz Felipe Medeiros, who likes to invest in two-bedroom apartments, the most sought after on the market. According to his assessment, the end of major construction at Suape, such as the petrochemical plant, decreased the demand from service providers for real estate companies in Boa Viagem. “Today an unfurnished apartment goes for R$2,200,” he says.” – Source (PT)