Detecting Bubbles in the Brazilian Commercial Real Estate Market: 2012-2023

This study delves into the dynamics of commercial real estate prices in Brazil, examining the existence of
speculative movements from 2012 to 2023. It employs a traditional present value asset pricing model with
a uniform discount factor, alongside recognized finance literature bubble tests. These include evaluations
for explosive, periodic, multiple explosive, and intrinsic bubbles, enabling the identification of potentially
unsustainable price trends if speculative bubbles emerge. Data from the Fipezap survey, provided by the
Institute of Economic Research Foundation (FIPE), highlights instances of price exuberance in certain
cities and the national index, as revealed by the explosive and multiple bubble tests. Conversely, no
evidence of periodic or intrinsic bubbles was observed across the cities studied.