{"id":5735,"date":"2021-07-13T09:00:14","date_gmt":"2021-07-13T12:00:14","guid":{"rendered":"https:\/\/superahd.com.br\/?p=5735"},"modified":"2023-08-07T22:31:19","modified_gmt":"2023-08-08T01:31:19","slug":"how-the-selic-rate-influences-the-buying-and-selling-of-real-estate","status":"publish","type":"post","link":"https:\/\/superahd.com.br\/en\/2021\/07\/13\/how-the-selic-rate-influences-the-buying-and-selling-of-real-estate\/","title":{"rendered":"How does the Selic Rate influence the buying and selling of real estate?"},"content":{"rendered":"

If you had to explain to someone what the Selic Rate is, and how it influences the direction of the economy, would that answer be on the tip of your tongue? According to a survey carried out by the InfoMoney portal, 99.4% of Brazilians don't know the concept of compound interest. Therefore, like the absolute majority of people, it would be necessary to seek an explanation before talking about the subject.<\/span><\/p>\n

Although the Selic Rate is a recurring topic in the news, and part of the routine applied to prices, talking about it properly is a place for specialists. In Brazil, financial education is not included in mainstream education, and this has a direct impact on the way people handle their money.<\/span><\/p>\n

However, the good news is that, with a little interest, you can begin to understand the subject. And if you're one of the people planning to buy or sell real estate, it's important to know how the variation in the Selic Rate directly influences real estate financing.<\/span><\/p>\n

What is the Selic Rate?<\/strong><\/h2>\n

The Selic rate is considered Brazil's basic interest rate. It is used by banks to calculate interest in their operations.<\/span><\/p>\n

The Selic rate is applied to loans, financing and banking products, and also serves to regulate inflation by controlling the purchase and sale of government bonds.<\/span><\/p>\n

Supera's Finance and Business Director, Andre Honorato, explains that the Selic Rate is the cost of money in the interbank market. It is the price that references the exchange of money between banks and international mechanisms. \"Selic is the cost of money for Brazil to take out a loan,\" he explains. <\/span><\/p>\n

This means that in 2020, for example, this operation cost 2% a year. This was considered a very low figure, and one that had never been reached before. However, this rate cannot remain at this level for a long period because it is unfeasible to maintain the economy on these terms.<\/span><\/p>\n

Selic and control of the economy <\/strong><\/h2>\n

Through this rate, the Central Bank is able to balance the inflow of money into the economy, because when government bonds, which are safe, are yielding more, it is natural for investors to want to earn more. <\/span><\/p>\n

Thus, when the Selic rate rises, those who were allocating funds to other operations return to public bonds, and this increase in the interest rate tends to equalize prices on the market.<\/span><\/p>\n

How the Selic Rate influences the real estate market<\/strong><\/h2>\n

The Selic Rate is the main reference that banks use to apply to their loan rates, so anyone who becomes a bank financing client needs to keep an eye on this index to know when it's the best time to take out a loan or take out a mortgage, for example.<\/span><\/p>\n

Because it serves as the basis for calculating interest rates on the different types of credit offered by banks and other financial institutions in the country, the Selic Rate directly benefits the decision to buy real estate when it is lower, as is the case at the moment.<\/span><\/p>\n

In this sense, buying a property financed at a lower interest rate is an advantage for those taking out a mortgage. Therefore, taking advantage of these opportunities is an incentive for the economy to grow.<\/span><\/p>\n

Buying real estate is an investment<\/strong><\/h2>\n

The Selic Rate, however, is also advantageous for those who wish to invest. In a low interest rate scenario, investments in fixed income funds, savings accounts and direct treasuries yield lower returns and are more risky. In this way, those who have money to invest see the benefits of the real estate market as a possibility of making a return on their investment. <\/span>\u2800\u2800\u2800\u2800\u2800<\/span><\/p>\n

Investors know that what is more important than avoiding the loss of the money they have already invested is guaranteeing the maintenance of the assets they have earned, and in this sense real estate is once again attractive. <\/span>\u2800\u2800\u2800\u2800\u2800\u2800<\/span><\/p>\n

And we're not talking about millionaire investments, this interest rate calculation mainly benefits those who are going to buy their first property, not just those who are buying to resell, for example.<\/span><\/p>\n

How to choose a property to buy and invest in<\/strong><\/h2>\n

Now it's easier to understand the relationship between the Selic Rate and the real estate market? Before buying any type of property, you need to understand what the best opportunities are.<\/span><\/p>\n

Regardless of whether <\/span>property<\/span><\/a> Whether it's for a home or an investment, the things to look out for before buying an apartment are the same:<\/span><\/p>\n

If you're buying a second-hand property:<\/b><\/h3>\n