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Interested in investing in real estate in São Paulo? You're not alone!
Many people are captivated by São Paulo's energetic atmosphere and dream of owning a modern apartment or a stylish penthouse there.
Would it be a good investment, though? Are property prices increasing in São Paulo? What is the current trend? Should I buy property in Jardins or Vila Madalena? Are there any secret taxes? Which place will give me the best yields?
We've solved it for you.
At TheLatinvestor, we've done our homework on this market. As a matter of fact, we've compiled all our findings in one pack. Get it now.
In the lines below, we will share some of this knowledge.
How's the property market in São Paulo?
Is the property market doing fine or not? A data-driven analysis will give us the answer.
Types of properties
In São Paulo, you can find a variety of properties for sale, including apartments, houses, condos, and commercial spaces.
Apartments are commonly available in high-rise buildings and offer various sizes to fit different needs. Houses provide more space and often come with yards or gardens. Condos offer a mix of private living and shared amenities like pools or gyms.
Additionally, there are commercial properties for sale, like shops and offices, suitable for businesses.
Each type of property offers distinct features and choices for potential buyers in São Paulo.
Should you buy or rent?
(If you plan to use it yourself and not as a rental)
Whether you've already made São Paulo your home or are contemplating it for the future, you might be pondering the buy vs. rent decision in this bustling Brazilian metropolis.
Obviously, it's better to buy if you're looking to build long-term wealth and security in São Paulo.
To make a good decision, look at the property price-to-rent ratio. This helps you understand the connection between rental income and the property's current price in terms of years.
According to Numbeo, the property price-to-rent ratio in São Paulo is around 23.6, which is around the world average.
To put it simply, it usually takes around 24 years of rental payments to buy a property in São Paulo.
Housing prices in São Paulo
On average, according to the last reported data from FipeZAP, buying a property in São Paulo will cost you around $4,200 per square meter.
Obviously, there is a significant spread. An apartment in Jardins may have a different price per square meter than a house in Morumbi. We actually give you a more detailed breakdown in our pack for buying property in São Paulo and in Brazil.
To help you understand better, it means that, instead of buying an apartment in Manhattan, you can get 3 properties in São Paulo.
However, housing prices in São Paulo are higher (85%) than in Rio de Janeiro.
The most expensive neighbourhoods in São Paulo are probably Moema, Vila Nova Conceição, and Jardim Paulista, while the cheapest are probably Cidade Tiradentes and Itaquera.
First and foremost, we have to acknowledge that Brazil is, today, a relatively stable country. The last Fragile State Index that has been reported for this place is 73.9.
Keep this in view when pondering the viability of buying a property in in São Paulo.
Also, according to the IMF’s forecasts, Brazil's economy is expected to soar by 7.5% in the coming 5 years, resulting in an average GDP growth rate of 1.5%.
If you want to invest in real estate in São Paulo it's a good thing because it means people are getting richer and then housing prices are likely to increase.
Also, in Brazil, the average GDP per capita has changed by 3.2% over the last 5 years. It's not much, but the growth is here.
Also, you will be pleased to know that the UBS Global Real Estate Bubble Index indicates that the property market in São Paulo is currently reasonably valued, with an index score of 0.2 (values below 0.5 signify fair valuation).
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Brazil right now.
Buying property in São Paulo
Buying real estate in São Paulo can be difficult due to the lack of reliable and up-to-date information available. That's why we have created the pack to buy property in São Paulo and in Brazil.
In the pack of documents we have built, we've covered everything about buying a property, from the contacts you'll need to the taxes that need to be paid, and even where to look for available properties.
Now, we're presenting a simpler version to make it easier for you to understand and follow along.
This is the step-by-step process to purchase a property in São Paulo:
- Research the market and set a budget for São Paulo properties.
- Hire a reputable real estate agent familiar with local regulations.
- Visit properties and choose one that meets your needs in São Paulo.
- Negotiate the price and terms, considering São Paulo's market conditions.
- Conduct a due diligence check, including property registration (matrícula) and public deed verification (escritura pública).
- Hire a real estate attorney experienced in São Paulo property law.
- Sign a "Promise of Purchase and Sale" contract (compromisso de compra e venda) and pay a deposit (sinal).
- Obtain necessary documents: Registro de Imóveis (property registration) and Certidão Negativa de Débitos (tax certificate).
- Pay the remaining amount on the agreed date, often through a boleto bancário (banking ticket) in São Paulo.
- Register the property with the notary (cartório de registro de imóveis).
- Pay the property transfer tax (ITBI - Imposto de Transmissão de Bens Imóveis) in São Paulo.
- Finally, receive the property deed (escritura pública) and officially transfer ownership in São Paulo.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Brazil.
Make a profitable investment in São Paulo
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Where to find a property
Find your dream property in São Paulo using these websites:
- Nacional - Offers properties for sale and contact information in Guarantã do Norte, MT.
- Green Acres - The leading international second home portal, offering properties for sale in Brazil, France, Portugal, Spain, Italy, and more.
- FazWaz - Brazil's leading real estate marketplace, offering a wide range of properties for buying, renting, and selling across various cities and regions in Brazil.
- On the Market - Specializes in luxury properties in Brazil, offering houses, penthouses, and apartments for sale in various locations.
- Expat - A platform offering housing services in Brazil, allowing users to buy, sell, rent, and find accommodation in cities like Rio de Janeiro, São Paulo, Salvador.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Brazil.
What you can get
As mentioned before, the average price per sqm in São Paulo is $4,200. A 1-bedroom property with a size of 60 square meters would cost approximately $252,000, whereas a 2-bedroom property with a size of 85 square meters would cost approximately $357,000.
However, the cost of properties will fluctuate depending on both their characteristics and their location.
Some spots will be friendlier to your wallet. You could find a house in Itaquera for $320,000, or you may encounter a house in Pirituba priced at $260,000.
We give a more detailed breakdown in our full pack for buying property in Brazil.
Mistakes to avoid
Here are the main pitfalls when buying a property in São Paulo, Brazil:
- "ITBI" tax: Overlooking the transfer tax (ITBI) could lead to unexpected financial burdens.
- "Habite-se" certificate: Ensure the property has this occupancy permit to avoid legal issues.
- Land tenure issues: Verify land ownership and potential conflicts before purchase.
- "IPTU" tax: Ignoring property tax (IPTU) rates can affect your budget.
- Urban growth boundaries: Check restrictions on property development and renovations.
- Informal settlements: Beware of buying in favelas without legal documentation.
- Environmental concerns: Assess potential risks like flooding and deforestation in the area.
- "Corretagem" commission: Negotiate real estate agent commissions to prevent excessive fees.
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Brazil Property Pack
Living in São Paulo
Living in São Paulo is an exciting experience, offering a vibrant atmosphere and plenty of opportunities for those looking to buy property.
Cost of living
The cost of living in São Paulo is generally high compared to other cities in Brazil. It is especially expensive for those coming from outside of Brazil, as the cost of rent and food can be quite high.
Here are some examples to better understand the cost of living in São Paulo:
- Rent for a one-bedroom apartment in Pinheiros neighborhood: $1,400/month.
- Monthly public transportation pass (Bilhete Único): $50.
- "Feijoada" lunch for two at a traditional restaurant: $40.
- "Caipirinha" cocktail at a bar in Vila Madalena: $5.
- Groceries at Mercado Municipal: $130/week for a family of four.
- Basic utilities for an 85m² apartment with Eletropaulo: $90/month.
- Ticket to a cultural event at Theatro Municipal: $20.
- "Pastel" at Feira da Liberdade: $3 each.
We want to show information in an easy-to-understand way. So, we made a table that lists the different neighborhoods in São Paulo. For yields, prices and rents, check our property pack.
Pinheiros is a trendy neighborhood known for its vibrant nightlife, art scene, and eclectic dining options.
Rich cultural life, excellent gastronomy, and accessible public transport.
High cost of living, heavy traffic during rush hours.
Vila Madalena is an artsy district with charming streets, graffiti-covered walls, and a bohemian atmosphere.
Artistic vibe, lively bars and music venues, and beautiful street art.
Noisy nightlife, limited parking options.
Bela Vista, also known as Bixiga, is a historic Italian neighborhood famous for its theater and delicious Italian restaurants.
Rich cultural heritage, great food options, and proximity to downtown.
Some areas may lack proper maintenance, limited green spaces.
Morumbi is an upscale neighborhood with luxury residences, shopping malls, and beautiful green areas.
Exclusive residential area, well-planned urban design, and proximity to parks.
High living costs, traffic congestion during peak hours.
Moema is a residential neighborhood with a high standard of living, known for its safety and upscale shopping options.
Safe environment, good schools, and proximity to Ibirapuera Park.
Expensive real estate, limited public transport options.
Itaim Bibi is a bustling neighborhood filled with office buildings, restaurants, and upscale bars.
Commercial hub, vibrant nightlife, and easy access to amenities.
High levels of noise and traffic, parking challenges.
Santa Cecília is a bohemian neighborhood known for its art galleries, vintage shops, and diverse culinary scene.
Artistic atmosphere, cultural diversity, and charming streets.
Some areas may be less safe at night, limited green spaces.
Liberdade is a bustling Asian neighborhood, famous for its cultural events, markets, and delicious Asian cuisine.
Cultural richness, unique architecture, and diverse dining options.
Can be crowded, parking difficulties.
Life in São Paulo
São Paulo is the economic powerhouse of Brazil, with a large and diverse economy that includes a robust manufacturing sector, a thriving financial services industry, and a large agricultural sector. It is also home to a rapidly growing tech sector, making it one of the most attractive cities for foreign investment in Latin America.
The GDP of São Paulo accounts for nearly 14% of Brazil's GDP, as per IMF data. That's a good thing because, when you buy property in a city with a strong economy, your investment is usually safer and not as affected by changes in the market.
What expats usually like the most in São Paulo is the vibrant cultural scene with its many attractions, such as the street art, music festivals, and world-renowned cuisine. They also enjoy the many outdoor activities and parks, like Ibirapuera Park and the nearby beaches.
However, the crime rate of São Paulo is still very high (with a value of 71, one of the worst scores in the world).
A good point for a property investor - São Paulo has an extensive mass rapid transit system, consisting of several metro lines and over 100 bus lines.
Access to healthcare in São Paulo is very good, with a Healthcare Index of 59. An effective healthcare infrastructure always boost the appeal of a place, which is good for real estate.
Finally, it is worth noting that the University of São Paulo ranks among the top 250 universities in the world.
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Renting out in São Paulo
For those aiming to buy property solely for renting out and earning income.
Tenant Profiles in São Paulo
According to the data reported by Wikipedia, the home ownership rate in Brazil is 73%, which is average.
It means that, if you decide to buy and rent out in São Paulo, there will be a good number of people who can become your potential tenants.
If you decide to buy and rent out to long-term tenants, you should target young professionals, students, and expats who are attracted to the city's vibrant culture and job market. Additionally, there are families and retirees who prefer São Paulo's lower cost of living and slower pace of life.
Here is a little summary table we've made for you.
|Property type and area
|Profiles of potential tenants
|What they are looking for
|Expected monthly rent in $
Apartment in Jardins
Professionals, upscale individuals
High-end living, cultural scene
$1,000 - $2,500
House in Morumbi
Spacious homes, greenery
$1,500 - $3,000
Studio in Vila Madalena
Artists, young professionals
Creative atmosphere, nightlife
$700 - $1,200
Condo in Brooklin
Business professionals, families
Modern amenities, convenience
$800 - $1,800
3-Bedroom Apartment in Moema
Safe neighborhood, parks
$1,000 - $2,000
High-rise Apartment in Itaim Bibi
Professionals, young couples
Urban living, dining options
$1,200 - $2,500
1-Bedroom Apartment in Pinheiros
Singles, young professionals
Trendy area, cultural events
$600 - $1,200
Nowadays, the rental yields you get in São Paulo are between 5% and 7%. There are some opportunities. So you know, a "good" rental yield is above 7%.
Properties in São Paulo's most central locations tend to offer the best rental yields because they are in high demand due to their proximity to public transport, amenities, and employment opportunities. Additionally, properties located in the city's more affordable neighbourhoods offer good rental yields due to the large number of potential tenants with lower budgets.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Finally, be aware that rental incomes in São Paulo are taxed at 15%, which is not much.
You could also decide to rent short-term to business travelers, students, or tourists visiting São Paulo for a short duration. Many people may also be looking for short-term rental opportunities due to relocation or job transfers.
If you decide to go with that option, look for properties in the Vila Mariana, Itaim Bibi, and Jardins neighborhoods of São Paulo. These areas are known for their high demand for short-term rentals.
You will have some competition though - there are around 19,000 Airbnb listings in São Paulo. The average daily rate is at $48.
You have the opportunity to generate a nice additional income stream then. Based on feedback from online testimonials and data analytics platforms such as AirDNA, Guesty, and Inside Airbnb, people who offer short-term rentals in São Paulo can make around $700 per month. Also, the average occupancy rate is estimated at 63%.
Is it worth buying real estate in São Paulo then?
Certainly, when it comes to buying property in São Paulo, it's not a one-size-fits-all decision.
Let's get straight to the point: If you're looking for a stable long-term investment and have the financial means to do so, buying property in São Paulo can be a smart move.
The city's property market, while not without risks, offers the potential for long-term wealth accumulation. The property price-to-rent ratio is reasonable, suggesting that over time, buying can be more cost-effective than renting.
Additionally, the city's economy is relatively stable, and forecasts indicate potential growth, which can lead to an increase in housing prices. São Paulo's rental market also provides opportunities for income generation, with decent rental yields in various neighborhoods.
So, if you plan to put down roots, have a stable financial situation, and understand the local market dynamics, buying a property in São Paulo is worth considering.
On the flip side, if you're uncertain about your long-term plans in São Paulo or lack the substantial funds needed for a down payment, renting might be the better choice.
Real estate transactions involve significant upfront costs, and if you're only staying for a short period, these expenses may not justify the investment. Market volatility is also a factor to consider.
While São Paulo's property market is reasonably valued now, it can be subject to fluctuations, and selling in a hurry might not yield the expected returns.
Moreover, if you're unfamiliar with São Paulo's real estate landscape or the city's specific regulations, navigating the buying process can be challenging and risky.
In such cases, renting provides flexibility and peace of mind, allowing you to enjoy the city without the long-term commitment and financial responsibilities associated with property ownership.
In a nutshell, buying property in São Paulo can be a promising venture for those with a long-term vision and financial readiness, but it's not for everyone.
Weigh your options carefully, taking into account your financial situation, commitment level, and understanding of the local market, before deciding whether to buy or rent in this dynamic Brazilian metropolis.
Make sure you understand the real estate market in São Paulo
Don't rush into buying the wrong property in Brazil. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.