Brazil home improvement sector is steadily growing

The Brazil home improvement sector is steadily growing these days, as record property prices and high interest rates contribute to the growth of demand for home renovations among Brazilians and lead to the growth of construction materials throughout the country.

According to recent data, provided by the Brazilian analyst agency Valor Econômico, property prices have increased dramatically in the main Brazilian cities. In accordance with the latest data, in São Paulo, Brasília, BH, Curitiba and Rio de Janeiro, in the last two years, prices have risen by up to 35 to 40 per cent, while the growth is currently ongoing.

Given this scenario, home improvement has become an alternative to purchasing a new property. This is also due to a significant increase in the cost of loans and mortgage lending.

At present many Brazilians consider home improvement work as a good investment, which leads to a growth of market prices for their property even in the short-term.

In fact, the rapid development of the DIY sector in Brazil began in 2020 after the beginning of the Covid-19 pandemic, when a sharp growth of demand for home improvement work in Brazil led to almost double the growth of this market compared to 2019. According to data from numerous studies, during the pandemic the home and decor sector saw a 300 per cent growth in purchases, most of which were conducted via e-commerce. In relation to the bed, table and bath sector, according to the Brazilian Association of the Textile and Clothing Industry (Abit), it had revenues of BRL 21.10 bn (EUR 4 bn) in 2020. There was also a sharp growth of sales of construction materials, which was confirmed by representatives of most retail chains operating in this market segment in Brazil.

In general, the current situation in the Brazil DIY sector remains generally good, which is also due to a significant improvement of the country’s economics in recent years. This is contrary to some previous years, which were very tough for Brazil and its economics. There was a significant shrinkage of both the DIY and construction materials’ market in Brazil in 2015 and 2016 – the period of the last major Brazilian economic recession. According to statistics of the Brazil analyst agency IBGE, these two years recorded an accumulated drop of 6.7 per cent in GDP compared to 2014. In the construction materials and DIY sector the impact was especially devastating: even in 2021 – a year of excellent results for the segment – the construction GDP in Brazil…