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SUMMARY
Yes, buying off-plan in São Paulo is riskier now, especially if the deal depends on a big mortgage at handover or on strong resale demand for a generic small unit.
The city itself is not in a new-build crisis. Developers are still selling more than 110,000 homes a year, but launches have been running even faster, so the risk is increasingly about what gets delivered in the same micro-market at the same time.
That makes local competition more important than citywide demand. A project can sell quickly today and still hand over into a crowded rental or resale market three years later if several nearby towers contain almost interchangeable apartments.
Small units deserve the most scrutiny. Compact apartments are still among the fastest-selling products off-plan, but they are also the easiest units for investors to copy, furnish similarly and put back onto the market at the same moment.
INCC is one of the least visible ways a launch discount can disappear. If the unpaid balance is indexed faster than comparable finished apartments are appreciating, the buyer can take construction risk without ending up with much of a price advantage.
Buying at launch is therefore not automatically cheaper. The useful comparison is the expected all-in cost at delivery against real prices for completed alternatives nearby, not the developer's future brochure price.
Financing risk has become much harder to ignore. Buyers who need the bank to fund the maximum possible amount at handover are exposed to future mortgage rates, their own income and debt position, and the bank's final valuation of the apartment.
Getting out early can also be expensive. Distrato rules make cancellation clearer, but they do not turn construction payments into money a buyer can recover freely if plans change.
Patrimônio de afetação meaningfully reduces the damage from a developer's wider financial problems, but it does not protect against overpaying, weak rental demand, an expensive mortgage or a bad resale market. Developer quality still matters a lot, and the spread between stronger and weaker companies is wide enough to make selection part of the investment case.
The best off-plan deals still have a case: conservative financing, a clearly verified project structure, a genuine all-in discount to finished stock, and limited competing supply at delivery. The deals that look most fragile are leveraged, overpriced and easy to replace, even when the brochure says “near the metro.”
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Is buying off-plan in São Paulo riskier now?
Yes, buying off-plan in São Paulo has become somewhat riskier, especially for buyers who will need a large mortgage at handover.
The latest Secovi-SP numbers explain why this question has become more important. São Paulo developers sold 114,000 new homes over the 12 months through June, so demand is still huge. At the same time, developers have been launching homes even faster. In the 12 months through May, 144,700 units were launched, up 17% from a year earlier.
That gap does not mean São Paulo suddenly has 30,000 unwanted apartments, because launches and sales happen at different stages and across different projects. Still, the city is adding new supply at an extraordinary pace.
The bigger change for off-plan buyers comes from what happens between signing and receiving the keys. Construction costs are still rising quickly, mortgage rates remain expensive, and a large amount of today's new supply will eventually reach the rental and resale markets at roughly the same time.
So today's São Paulo off-plan market is less forgiving than it was a few years ago. Buyers can still make very good purchases, but there is less room for a mediocre unit, an optimistic financing plan or a price that only looks cheap in the sales office.
| São Paulo new-build market | Recent reading | Comparison | What it tells us |
|---|---|---|---|
| New-home sales, latest 12 months | 114,000 units | Still close to recent highs | Demand remains very large |
| Launches, 12 months through May | 144,700 units | +17% year-on-year | Supply is growing faster |
| New-home sales in June | 9,308 units | 9,993 in May | No collapse in buyer demand |
| New-home sales in March | 10,857 units | One of the stronger recent months | Buyers are still active despite expensive credit |
Is São Paulo actually becoming oversupplied with new apartments?
São Paulo has much more new supply coming, but the city has not reached the kind of broad oversupply where developers simply cannot find buyers.
That distinction matters. Secovi-SP recorded almost 145,000 launches over 12 months at one point this year, yet annual new-home sales were still running above 110,000 units. Monthly sales have also stayed around 9,000 to 11,000 units lately.
Developers are adding apartments extremely quickly and buyers are still absorbing an enormous number of them.
The danger becomes easier to see when we stop looking at São Paulo as one market. A buyer is usually competing inside a small radius: one metro station, one neighborhood and one apartment type. Ten thousand monthly sales citywide offer little protection if four towers with hundreds of similar studios are finishing near the same station.
That is where today's higher launch volume changes the off-plan calculation. We would worry much more about local supply at the expected delivery date than about a dramatic citywide property crash.
Get fresh and reliable data on the São Paulo property market
A Faria Lima address is being charged for streets that are a fifteen minute walk from it, and no parking space comes with it. Where prices sit furthest from what places earn and resell for.
Are small off-plan apartments in São Paulo becoming especially risky?
Small São Paulo apartments are where future competition looks most intense, although buyers are still snapping them up today.
Secovi-SP's breakdown earlier this year showed apartments between 30 and 45 m² dominating the market. In one monthly survey they represented about 70% of launches and 68% of sales. Their monthly VSO, which measures sales relative to available inventory, reached 11.6%.
That is very healthy selling speed.
The uncomfortable part comes later. Many compact apartments are bought by investors rather than by families planning to stay for decades. Once several nearby buildings finish, owners can end up advertising very similar units to the same tenants and resale buyers.
A 35 m² apartment next to Paulista Avenue, Faria Lima or a busy metro interchange can handle that competition much better than a generic 25 m² investor unit in an area where developers still have plenty of land to build.
The current numbers tell us that small apartments remain easy to sell off-plan. They do not tell us that every buyer will find the same level of demand when those apartments come back onto the market as completed units.
| São Paulo unit size | Share of launches in the referenced Secovi-SP survey | Share of sales | Monthly VSO |
|---|---|---|---|
| Under 30 m² | 21% | 23% | 7.8% |
| 30–45 m² | 70% | 68% | 11.6% |
| 45–65 m² | 8% | 6% | 7.3% |
| 66–85 m² | 1% | 1% | 3.0% |
| 86 m² and above | Very small | About 2% | Roughly 1.7–2.2% |
Can INCC wipe out the discount on a São Paulo off-plan apartment?
Yes. INCC can eat a surprising amount of the apparent discount on a São Paulo off-plan property before the buyer even gets the keys.
FGV's INCC-M was rising 6.82% year-on-year nationally in May, while São Paulo's local reading was around 7.4%. Labor costs were among the main pressures.
Off-plan contracts commonly adjust amounts due during construction using a construction-cost index. That means the R$500,000 or R$700,000 figure a buyer sees at launch should never be treated as the final economic cost without reading the payment schedule.
The comparison with finished-property prices is revealing. Around the same period, FipeZAP was showing São Paulo residential asking prices rising by roughly 4% over 12 months. These indexes measure different things, so we should not compare them as if they were identical. But a buyer whose unpaid balance is climbing around 7% while comparable apartment prices are moving around 4% has a real problem: part of the launch discount is disappearing automatically.
Suppose R$500,000 remained fully exposed to 7.38% annual indexation for three years. It would become roughly R$619,000. At 4.23% annual property appreciation, R$500,000 would become about R$566,000. Those are illustrations rather than forecasts, but the R$53,000 difference shows why the index cannot be treated as a footnote.
| Illustrative three-year example | Starting amount | Annual rate used | Amount after three years |
|---|---|---|---|
| Indexed balance | R$500,000 | 7.38% | About R$619,000 |
| Property value | R$500,000 | 4.23% | About R$566,000 |
| Gap | — | — | About R$53,000 |
| What the example shows | — | — | Construction indexation can absorb much of an apparent discount |
Everything a foreign buyer should know before buying in São Paulo
The pack also covers what the condomínio and the IPTU take every month, and which certificates have to be clean before you pay anything.
Is buying a São Paulo apartment at launch still automatically cheaper?
No. Buying at launch can still be cheaper, but the buyer has to prove the discount instead of assuming it exists.
This is one of the easiest places to get fooled by off-plan marketing. A developer launches an apartment at R$700,000, raises the official price several times during construction and later advertises the same floor plan at R$850,000. The original buyer now appears to have made R$150,000.
That paper gain may be much smaller in reality.
The original buyer has paid INCC-linked adjustments. A later buyer may receive a discount, free upgrades, help with brokerage, a longer payment plan or another incentive that never appears in the published list price. Once the project is delivered, the original buyer also has to compete with completed apartments in neighboring buildings.
We would compare the expected all-in acquisition cost at delivery with actual transaction prices for finished alternatives nearby. Comparing today's launch price with the developer's future brochure price tells us very little.
Are mortgage rates making São Paulo off-plan purchases more dangerous?
Yes. Expensive mortgages are currently one of the clearest reasons an off-plan purchase in São Paulo can go wrong even when the building itself turns out perfectly fine.
Banco Central data for July showed regulated TR-linked mortgage rates ranging from 8.09% a year at Caixa to around 11.8% at Bradesco, Santander and Itaú. Banco do Brasil was around 10.24%.
Brazil's Selic rate has started coming down from its 15% peak, but at 14% it remains extremely high by the standards borrowers enjoyed several years ago.
An off-plan buyer who signs today may not need the main mortgage for another two or three years. Rates could be lower by then. The problem is that nobody signing the purchase contract today knows what rate a bank will actually offer at handover.
The difference becomes large on a big loan. A buyer expecting to finance several hundred thousand reais can see the monthly payment change dramatically when rates move by three or four percentage points.
A cash-heavy buyer can live with that uncertainty. Someone whose entire purchase depends on obtaining the maximum mortgage possible at delivery is taking a much bigger gamble.
| Bank / financing reference | Recent annual rate | Position in current range | Off-plan implication |
|---|---|---|---|
| Caixa, regulated TR | 8.09% | Lowest among major lenders shown | Still expensive compared with the cheap-credit years |
| Banco do Brasil | 10.24% | Mid-range | Much heavier monthly debt service |
| Bradesco | 11.76% | High | Financing assumptions need a large buffer |
| Santander | 11.82% | High | Same problem |
| Itaú | 11.86% | High | Same problem |
| Selic | 14.00% | Still very restrictive | Credit conditions remain difficult |
The bairros and projects in São Paulo that are most overpriced
A Faria Lima address is being charged for streets that are a fifteen minute walk from it, and no parking space comes with it. Where prices sit furthest from what places earn and resell for.
What happens if the bank lends less than a São Paulo off-plan buyer expected?
A São Paulo off-plan buyer can face a large cash shortfall at handover if the final mortgage comes in below the amount originally expected.
This deserves more attention than it usually gets in sales presentations.
Suppose a buyer expects a bank to finance R$600,000 when the building is ready. Between signing and delivery, income can fall, the buyer can take on new debt, banking rules can change or the finished apartment can receive a lower valuation than expected.
Any of those changes can reduce the loan.
The developer does not automatically cover the missing amount. The buyer normally has to find the difference.
This risk is especially uncomfortable when the original purchase price was aggressive. Banks lend against the finished collateral and the borrower's finances; they do not have to accept the developer's launch narrative about how much the unit should be worth in three years.
For a leveraged off-plan buyer today, we would want the purchase to remain affordable even if the eventual mortgage were materially smaller than planned.
Can a buyer easily cancel an off-plan apartment in São Paulo?
No. Leaving a São Paulo off-plan contract can be expensive, which makes a change in income, family plans or mortgage eligibility much more painful.
Brazil's distrato rules give both sides a clearer legal framework than existed in the past, but buyers can still lose a meaningful portion of what they have paid.
Under Law 13,786, cancellation can involve brokerage deductions and contractual penalties. In projects using patrimônio de afetação, the statutory framework can allow penalties reaching up to 50% of amounts paid in some circumstances, with reimbursement timing also governed by the law and the contract.
That does not mean every buyer automatically loses half their money. Courts, contract terms, the cause of termination and the structure of the project all matter.
The important point for an off-plan buyer is much simpler: installments paid during construction should not be treated like cash sitting in a savings account that can be withdrawn whenever plans change.
With mortgage affordability still tight, that lack of flexibility deserves more attention than it did when credit was much cheaper.
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Does patrimônio de afetação really protect São Paulo off-plan buyers?
Yes. Patrimônio de afetação gives São Paulo off-plan buyers meaningful protection against the developer's wider financial problems, although buyers still need to check that the specific project actually uses it.
Under Brazil's incorporation rules, the land and other assets linked to a qualifying development can be legally separated from the developer's general estate. If the developer gets into serious financial trouble, those project assets are shielded from many unrelated corporate creditors.
That can make an enormous difference in an insolvency.
Purchasers may also obtain mechanisms to organize and decide how to continue or deal with the development. Brazil created these protections partly because earlier property crises showed how badly buyers could be hurt when project money and corporate money were mixed together.
The protection has limits. A segregated project can still be delayed, suffer quality problems or require difficult decisions if the developer fails. Patrimônio de afetação also does nothing for a buyer who simply paid too much or cannot afford the mortgage.
We would verify the project's incorporation documents and the actual registration instead of accepting a salesperson's verbal assurance.
| Buyer risk | Does patrimônio de afetação help? | Remaining exposure | What to check |
|---|---|---|---|
| Developer bankruptcy | Substantially | Completion may still become complicated | Registered project structure |
| Developer's unrelated debts | Yes | Project-specific liabilities remain | Incorporation documents |
| Construction delay | Limited protection | Buyer still suffers the delay | Delivery clauses |
| Bad resale price | No | Buyer takes the market loss | Comparable finished units |
| Expensive mortgage | No | Buyer takes the financing risk | Cash buffer |
| Voluntary cancellation | No automatic escape | Buyer can lose money | Distrato provisions |
Are São Paulo developers themselves getting into trouble?
Some São Paulo developers are showing more stress than others, but the latest results do not point to a broad developer crisis.
The differences between companies are useful for an off-plan buyer because they show why developer selection matters more now.
Cyrela reported roughly R$3.8 billion of launches and R$2.6 billion of contracted sales in the second quarter, while first-half contracted sales reached about R$4.7 billion. That gives us very little reason to think the company is struggling to find buyers across its portfolio.
EZTEC also reported a record first half for sales, with roughly R$1.44 billion gross and R$1.28 billion net. At the same time, second-quarter cancellations reached about R$97 million, equivalent to 14.4% of gross sales. The company can be selling strongly while still showing us that cancellations are a real part of the market.
Even looked weaker. Its second-quarter net sales fell to roughly R$156 million, around 65% below the comparable period a year earlier, alongside a less comfortable financial picture.
We should be careful with these comparisons because the developers target different buyers and have different launch calendars. Still, the spread is large enough to reject the idea that every São Paulo developer deserves the same risk assessment.
For off-plan buyers, the useful questions are mundane: how much cash does the developer have, how leveraged is it, how quickly are its projects selling, how many cancellations is it seeing and has it repeatedly delivered projects without major problems?
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Could today's São Paulo construction boom hurt buyers only after delivery?
Yes. A lot of today's off-plan risk may only become visible when apartments are completed and investors start competing with each other.
This is probably the part of the São Paulo market we would watch most closely over the next few years.
The city has recently been running at more than 110,000 new-home sales a year while launches reached about 145,000 at their recent 12-month peak. That works while buyers keep absorbing new projects.
Delivery creates a different market.
An investor who bought an apartment from a developer no longer competes only against that developer's other units. The investor competes against every owner trying to rent or resell a similar apartment, including buyers from neighboring projects launched during the same boom.
This is especially important around dense transit corridors where multiple buildings can be approved within walking distance of one another.
So a project selling quickly today can still turn into a crowded rental market three years later. Off-plan sales velocity and post-delivery rental liquidity are related, but they are far from the same thing.
Is São Paulo's strong housing demand enough to make off-plan buying safe?
No. São Paulo's huge housing demand gives the market a strong base, but it cannot rescue every overpriced or badly located off-plan apartment.
The city remains remarkably active despite expensive credit. The latest Secovi-SP reading put annual new-home sales at 114,000 units. National ABRAINC-Fipe data also showed new-home sales growing 11.4% during the first four months of the year.
However, the national breakdown tells a more interesting story. Minha Casa, Minha Vida unit sales rose 17.1%, while real sales in the middle- and high-income segment fell 10.3%. Meanwhile, launches in that middle- and high-income category increased 14.6%.
That split is much more useful than simply saying Brazil's property market is strong.
A huge part of current demand is concentrated in lower-ticket housing supported by affordability programs and different financing economics. A buyer paying R$1.5 million for an investor apartment cannot safely use those sales numbers to justify the purchase.
Strong underlying housing demand makes a systemic São Paulo crash less convincing today. It does much less for a specific building where the asking price, mortgage burden or future competing supply is wrong.
| Current market evidence | Recent result | What we learn |
|---|---|---|
| São Paulo new-home sales, 12 months | 114,000 units | Citywide demand remains huge |
| Brazil new-home sales, first four months | +11.4% | Demand held up despite expensive credit |
| MCMV unit sales | +17.1% | Lower-ticket housing is driving much of the growth |
| Middle/high-income real sales | -10.3% | More expensive housing is weaker |
| Middle/high-income launches | +14.6% | Developers are still increasing supply there |
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Are expensive off-plan apartments in São Paulo more vulnerable right now?
Yes. The middle and upper end of São Paulo's off-plan market deserves more caution because demand there looks weaker than the headline market numbers suggest.
Secovi-SP has repeatedly shown faster sales velocity in economic housing than in more expensive categories. In one early-year reading, economic housing posted a monthly VSO of 12.1%, compared with 5.4% for the rest of the market.
The gaps became even larger higher up the price ladder. Apartments between R$700,000 and R$1.4 million had a VSO around 3%, while R$2.1 million to R$5 million units were around 2.2%. Homes above R$5 million were roughly 1.6%.
Luxury property in an exceptional location can obviously sell for reasons that disappear in citywide averages. Scarce land, views, architecture and extremely wealthy buyers create their own micro-markets.
The more awkward area is the middle: apartments expensive enough to miss the strongest affordability programs but ordinary enough to face plenty of substitutes.
That is where we would be particularly reluctant to pay a large off-plan premium today.
Does buying near the metro still protect a São Paulo off-plan investment?
Usually, yes. Metro access still improves the odds of finding tenants and resale buyers in São Paulo, but a station surrounded by new towers can also create its own supply problem.
Compact apartments depend heavily on location because buyers and tenants are accepting less private space in exchange for convenience.
Research commissioned by REV3 and carried out by Idea BR on São Paulo MCMV projects launched between 2023 and 2025 found stronger sales performance around metro-accessible locations. That fits the wider logic of the city's compact-housing boom.
But the phrase “near the metro” has become too easy to put on a brochure.
São Paulo's planning rules have encouraged high-density development around major transport corridors. The same station that gives a project great accessibility can attract five, ten or twenty other projects.
Before buying, we would map the projects already under construction and approved within roughly a ten- to fifteen-minute walk. If hundreds or thousands of similar apartments will arrive before or shortly after handover, the metro alone does not create scarcity.
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What each bairro costs, what it rents for, how long it sits before it sells. Plus the things nobody writes down: what the condomínio and the IPTU take every month, and which certificates have to be clean before you pay anything.
What would make a São Paulo off-plan apartment too risky for us today?
We would walk away when the deal needs several optimistic assumptions to work at the same time.
The clearest case is an apartment whose expected indexed cost at completion already sits close to the price of comparable finished units nearby. We are taking construction, timing and financing risk, so we want to be paid for taking it.
Heavy leverage is another problem. If the deal only works with a very large future bank loan at a favorable mortgage rate, there is almost no cushion.
We would also be wary of projects surrounded by a large pipeline of almost identical apartments, especially tiny investor units. That competition may barely matter while the developer is selling the dream off-plan and become painfully obvious once hundreds of owners receive their keys.
Weak developer finances, unclear incorporation documents or no verified patrimônio de afetação would make the case worse.
The final red flag is a sales pitch built mainly around future appreciation. If a São Paulo off-plan deal needs 10% annual price growth to look attractive, we already know too much has to go right.
So is buying off-plan in São Paulo riskier now?
Yes, moderately. São Paulo off-plan property is riskier now because financing remains expensive, construction indexation can materially raise the final cost, and today's huge development pipeline will create much more competition in some neighborhoods after delivery.
We do not see evidence of a São Paulo-wide new-build crisis. The latest annual sales figure is still around 114,000 homes, monthly sales remain strong, and large developers continue moving substantial volumes.
The risk has shifted toward the economics of the individual purchase.
A strong off-plan deal can still make sense today when the developer is financially solid, patrimônio de afetação is properly registered, the buyer has plenty of room in the financing plan, the expected indexed cost is clearly below comparable finished properties and the neighborhood does not have a wall of similar supply coming.
We would be much tougher on generic investor units. A tiny apartment bought mainly because it is “close to the metro,” a brochure advertises an attractive yield and the salesperson says prices will rise before completion is exactly the kind of deal that deserves more skepticism these days.
That gives us a fairly clear answer. Buying off-plan in São Paulo has become riskier, but the extra risk is concentrated in leveraged, overpriced and easily replaceable properties. Good projects with genuine scarcity and conservative financing still have a strong case. The days when buying early by itself was enough to make a São Paulo property deal look clever are much harder to defend now.
Everything a foreign buyer should know before buying in São Paulo
The pack also covers what the condomínio and the IPTU take every month, and which certificates have to be clean before you pay anything.
OUR METHODOLOGY
This analysis tests whether buying off-plan in São Paulo has become riskier by separating the purchase into the parts that actually determine the outcome: new supply and absorption, unit size and price segment, construction-cost indexation, mortgage conditions, handover financing risk, cancellation rules, project protections, developer performance, the composition of demand, transit-led development and the competition that can appear after delivery.
We prioritized the freshest direct evidence available. Secovi-SP is used for São Paulo's primary residential market and its breakdowns by unit size, price segment, launches, sales and VSO. FGV is used for INCC-M and construction-cost pressure, Fipe/FipeZAP for residential price movements, Banco Central do Brasil for mortgage and policy rates, and ABRAINC-Fipe for the national market split between Minha Casa, Minha Vida and middle- and higher-income housing.
We kept several comparisons deliberately separate. The gap between launches and sales is used to judge how quickly supply is being added relative to absorption, not as a count of unwanted apartments. Current off-plan sales velocity is not treated as proof of future rental or resale liquidity. INCC and residential price growth are compared to test whether indexation can erode the advantage of buying early, not because the two indices measure the same thing.
For legal and project-structure risk, we relied on federal legislation governing distrato, real-estate incorporations and patrimônio de afetação. For developer-specific risk, we used company and CVM disclosures from Cyrela, EZTEC and Even to show how sales, cancellations and financial conditions can differ materially across developers.
Where datasets covered slightly different recent periods, we used the closest relevant readings instead of forcing them into a single artificial date. Illustrative calculations, such as the three-year INCC example, are there to show the size of the risk rather than to forecast future indexation or property values.
Key sources include: Secovi-SP's 2026 monthly residential market series, Secovi-SP's May 2026 market report, Secovi-SP's January 2026 report and unit-size segmentation, FGV IBRE on INCC-M, FipeZAP's May 2026 residential sale index, Banco Central do Brasil's regulated TR-linked mortgage-rate data, Banco Central do Brasil's August 2026 Copom decision, Law 13,786/2018 on distrato, Law 10,931/2004 on patrimônio de afetação, the compiled Law 4,591/1964 on real-estate incorporations, Cyrela Investor Relations, ABRAINC-Fipe's May 2026 indicators, and São Paulo City Hall's material on the Eixos de Estruturação da Transformação Urbana.
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A Faria Lima address is being charged for streets that are a fifteen minute walk from it, and no parking space comes with it. Where prices sit furthest from what places earn and resell for.
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