The real estate agency market - Brazil

1.1 Definition and scope of study

Real estate agencies are intermediaries that facilitate the reconciliation of supply and demand in order to allow market balance within the housing industry. Real estate brokers supervise negotiations between sellers and buyers or owners and tenants.

Real estate agencies work for two types of clients :

• Residential clients: most real estate agencies are dedicated to individuals looking to buy or rent houses, plots or garages in urban and rural areas
• Commercial clients: a minority (less than 10%) of real estate brokers are focused on finding commercial real estate - offices, industrial land, factories and warehouses or shops

In a highly competitive market, the role of independent real estate agents is gradually diminishing in favor of franchises, who are more widely present and more visible. Competition from Internet tools, and in particular from online platforms, has weighed on the demand for property, although the proportion of property sales between individuals has remained stable.

In 2019, the Brazilian real estate sector was one of the few to surpass expectations. The civil construction sector recorded a growth of 2% (equivalent to twice the forecast growth of total GDP). Although it does not seem to be a significant figure, it is necessary to look at the context and evaluate that the segment did not grow for 6 consecutive years, and is today 30% below the maximum level seen in early 2014. The biggest driver for this market was (and is being), the basic interest rate that has already beat the historic low by reducing the cost of real estate credit, accompanied by the increase in public investment in real estate financing and the online sales boom.