Those with money to spend can have the luxury of choice: at least 200 square meters of area, high ceilings, acoustic finishing, a bathroom in each room and at least four parking spaces. The list of requirements, which is long and does not stop there, reflects the profile of the fastest growing civil construction segment in São Paulo: residential buildings for the (very) wealthy.
At a time when the economy has entered a technical recession – with a 0.1% drop in Gross Domestic Product (GDP) in the third quarter – and when the average Brazilian suffers from falling income and inflation, construction companies are running to offer the “super-rich”, who seem oblivious to the country’s economic debacle, experiences that do not fall short of the most sophisticated hotels and country clubs.
A survey by Brain, a consultancy specializing in the real estate market, reveals that the launches of the luxury and super-luxury segment in São Paulo, from January to September 2021, totaled 4,217 units – an increase of 129% compared to the same period last year and double the expansion of the construction as a whole. Today, the share of these releases in the city is 8.5%, compared to 5.8% last year. It is a historically high participation: the previous record, of 7.8%, had been registered in 2019.
The general sales value of these luxury properties reached R$9.4 billion until September, almost doubling the value of the same period last year. In reais, the share of the very high income reached 37.5% in 2021 – another historic mark.
But, after all, what differentiates “luxury” from “super-luxury”? The sector works with price ranges, explains Fabio Araujo, a partner at Brain consulting. Luxury residential properties for the São Paulo market are those traded above R$1 million; the super-luxury, over R$ 2 million.
The estimate, according to the executive, is that luxury buildings are accessible to around 5% of the Brazilian population, while luxury buildings are restricted to the top of the pyramid – a dream attainable only by the richest 1% .
However, the most popular apartments among São Paulo millionaires cost, on average, R$ 5.1 million, or R$ 21.7 thousand per square meter, points out Brain. The average size of these properties exceeds 200 m². In the most expensive apartments in the city, however, the square meter is worth R$ 63,000.
The strong growth of this segment of the market, especially of luxury, according to Araújo, is due to an equation formed by the effect of the pandemic, which made families look for larger properties. In addition, in 2020 the interest rate hit a historic low, causing wealthier families to rethink their investments, which led many people to buy a new property.
With interest rates rising, however, the party may be over. “In this public’s account, contrary to what happens in the middle class, where interest affects the financing decision, what changes for them is whether it’s worth making another type of investment”, says the specialist.
In the capital, 13 buildings charge more than R$ 60 thousand per square meter.
With final values exceeding R$ 15 million, the capital of São Paulo currently has 13 projects that charge more than R$ 60 thousand per square meter of an apartment. These units are concentrated in upscale neighborhoods such as Jardins, Vila Nova Conceição and Moema, according to consulting firm Brain.
Companies see these ventures as “objects of desire”. “This customer is well-travelled, frequents great hotels and expects a sensation and experience in everything he consumes,” says Cyrela’s development and business director, Piero Sevilla. In one of the brand’s developments, in Moema, the signature will be Yoo Studio, a European design firm founded by Philippe Starck and John Hitchcox. “This has been very successful. We started in 2013 with signed buildings. And the response has been very good.”
Sevilla, from Cyrela, says that this client is also looking for flexibility: today, the construction company already offers ten models of floor plans for the same unit, all designed by the architect responsible for the project.
Gafisa, which made the strategic decision to turn to the very high standard sector, also followed the path of launching “cobranded”. The first was in the Jardins district, with the Italian brand Tonino Lamborghini. “It’s a brand that brings a lot of design and life style. There is an associated value”, says the president of Gafisa, Guilherme Benevides.
But it was in Rio de Janeiro that the company hit a milestone in the sector, charging R$ 100,000 per square meter for an apartment in Leblon – or almost R$ 30 million.
Executive director of development at Even, a company dedicated to high standards, Marcelo Dzik says that today high standards require more open plants, more airy areas and plenty of natural light. Other than that, renowned architects and decorators are always present in projects.
The president of construction company Setin, Antonio Setin, also points out the location factor. With land in nobler regions increasingly scarce, development costs have been rising. Setin also sees a new profile of buyers to be coveted: “We see some young people getting rich earlier and earlier, largely from the technology and fintech areas.”
Reference: CNN Brasil