“It’s almost nothing, not even 10 percent of what we have,” Carlos Fernando de Carvalho, 91, the tycoon spearheading the development, told Veja, a newsmagazine. “We were ready to launch the entire project, but there’s no way to do that. Buyers are in short supply.” Beyond the Olympic Village’s sales fiasco, prices of residential properties in Rio have dropped as much as 12 percent in the past year. With annual inflation soaring to nearly 10 percent, that means property prices in some areas here have declined more than 20 percent in real terms over the past year. And after the plunge in Brazil’s currency in 2015 is priced in, many apartments cost about half of what they did a year ago in dollars. Rio led declines among all Brazilian cities in residential real estate prices in October, with average prices falling 0.44 percent from the previous month, according to FipeZap, a real estate index. Office rents in the city are also declining. While Rio had once surpassed New York as the most expensive real estate market in the Americas, monthly office rents now go for about $3.33 per square foot, down from $7 per square foot as recently as 2013, according to CBRE, a global real estate advisory firm. Then there is the dismal jobs picture: The Labor Ministry estimates that Rio lost 48,500 jobs so far this year, the second-highest number of any Brazilian city, as graft scandals hobble construction giants and Petrobras, the national oil company. Making matters worse, economists say that Rio’s plunging real estate prices may be the harbinger of a much more severe economic crisis in the city, with unemployment here about to surge even further as construction of Olympic venues, hotels and roadways starts winding down in the months ahead.
Rio is reportedly experiencing the biggest real estate glut in decades, leading to fears that a crash is imminent. The situation is being made apparent by developers' inability to sell 3,604 of new high-rises that have been built in anticipation of demand in the run up to the 2016 Olympics. The poor state of the wider economy in Brazil is also contributing to the struggling housing market for developers, with real estate prices having fallen an effective 20% over the last year, when the infaltion rate of 10% is factored in. yet the falling prices are still not enough to attract buyers, with one developer, Carvalho Hosken and Odebrecht, having sold only about 230 of dozens apartments built in the Olympic Village.