Figures released on Friday, October 2nd, by FipeZap, the Economic Research Foundation Institute (Fipe), showed that the price of residential property in twenty Brazilian cities fell 0.12 percent in September. It is the second month in a row the country has experienced a downturn in the property market. It is also the biggest monthly drop in the history of the series, which started in 2011.

“It’s a continuation of the movement that we have been seeing for some time now with a nominal fall,” said Eduardo Zylberstajn, coordinator of the research.

Despite the drop, the price of residential property in Rio de Janeiro remains the highest in the country. The average price in the city was R$10,538 per square meter compared to a country average of R$7,604.

Eight of the twenty cities surveyed experienced a drop in the value of their real estate month on month. Porto Alegre and Rio de Janeiro saw the greatest change with falls of -1.26 percent and -0.52 percent respectively. Florianópolis (-0.31 percent), Contagem (-0.22 percent) Brasília (-0.16 percent), Niterói (-0.15 percent), Goiânia (-0.09 percent) and Recife (0.04 percent) all followed.

For the ninth consecutive time, the variation of the FipeZap index was lower than the rate of inflation. It was the case in all the cities involved in the research. Despite the month-on-month drop Fipe expect the index to register a 0.9 percent increase by the end of 2015. It was up 2.63 percent compared to the same month in 2014.

São Paulo, the second most expensive city in the country, saw a small increase of 0.08 percent in the value of its residential property. The average price per square meter there was R$8,614. However the value of real estate in the city’s upmarket neighborhoods has cooled over the past twelve months. The twenty most expensive areas saw an increase in value of twelve percent between August 2013 and August 2014. In August this year, the only neighborhood to see double-digit growth was Jardim Paulistano (14.7 percent).

Apart from Jardim Paulistano and Itaim, the price per square meter in the other eighteen neighborhoods increased in value at a rate lower than inflation leading to a drop in real values. Sumaré, Jardins and Campo Belo remained stable, while Vila Madalena experienced a nominal drop in prices (1.9 percent) in the past twelve months., which commissioned research by FipeZap into the São Paulo housing market, attributed the slowdown in the market to the ongoing nationwide economic crisis: rising unemployment is affecting the availability of mortgages due to nervousness of the banks and high inflation is pushing up the price of loans.