By Rogerio Jelmayer
SAO PAULO--Home prices in Brazil lost even more ground last year as the country's continued economic recession hurt consumer confidence.
Home prices increased just 0.57% last year, according to FipeZap, an index compiled by local research foundation Fipe based on prices in Brazil's 20 largest cities. This marked the smallest increase since 2011, when the current version of the index was initiated, and came in well below the rate of inflation.
The country's inflation rate for 2016 through mid-December stood at 6.58%. Brazil's statistics bureau will publish inflation figures for December and for the full year on Jan. 11.
From 2008 to 2013, home prices in the most desirable neighborhoods of Rio de Janeiro and Sao Paulo doubled, according to FipeZap. Real-estate prices in the country have lost traction mainly in the past two years, however, against the backdrop of a recession, rising unemployment rate and low consumer confidence, according to economists.
Brazil's economy is projected to have contracted 3.5% last year, according to the country's finance ministry, after shrinking 3.8% in 2015.
FipeZap is among the most widely recognized indexes for measuring real-estate prices in Brazil. The index, which launched in 2008 and increased the number of cities covered in 2011, is produced by a think tank affiliated with Sao Paulo State University.
Currently, Brazil's official statistical agency has no mechanisms to measure real-estate prices.
Write to Rogerio Jelmayer at firstname.lastname@example.org
(END) Dow Jones Newswires
January 04, 2017 04:50 ET (09:50 GMT)
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