Brazil’s housing market remains depressed, amidst the ongoing economic crisis and an uncertain political landscape, according to the latest market analysis conducted by the Global Property Guide.

The study of Brazil’s housing market shows that in Sao Paulo, residential property prices fell by 7.59% during the year to Q2 2016, worse than the 3.52% decline seen in a year earlier and the sixth consecutive quarter of falling house prices. Quarter-on-quarter, house prices dropped 1.58% in Q2 2016.

Brazil’s economy remains in deep recession and unemployment is at record high. The economy shrank by 3.8% in Q2 2016 from a year earlier, having shrunk every quarter since Q2 2014 – the country’s worst and longest recession in more than a century.

Worse, the country is in the midst of immense political turmoil. In August 2016, Michel Temer was sworn in as Brazil’s new president after the Senate voted to remove former President Dilma Rousseff, amidst the massive Petrobras corruption scandal. Unemployment rose to 11.3% in Q2 2016, sharply up from 6.5% two years ago, according to the country’s statistics agency, IBGE. Fitch Ratings recently downgraded Brazil’s sovereign rating into junk, in line with the other two major rating companies.

The economy is expected to contract by 3.8% this year, after a contraction of 3.8% in 2015, and growth of 0.15% in 2014, 2.7% in 2013, 1.8% in 2012, 3.9% in 2011 and 7.6% in 2010, according to the IMF.

By December 2015, the Brazilian Real (BRL) had lost about 32% of its value against the U.S. dollar to reach an average monthly exchange rate of BRL3.88 = USD1 as compared to BR2.64 = USD1 in December 2014. However in the first eight months of 2016, the real recovered almost 26.5% to reach BRL3.21 = USD1, largely in response to the formation of a new government.

House prices in Sao Paulo soared by 113% (inflation-adjusted) from 2007 to 2013, while Rio De Janeiro’s rose by 144%, as interest rates were progressively cut from 26% to 7.25% between 2003 and 2012.

However, starting in the first half 2013, the central bank raised the benchmark interest rate nine times to 11% in April 2014, causing a sharp economic slowdown. After holding the key rate steady for almost seven months, the central bank decided to raise it again by 25 basis points in October 2014, and by 50 basis points in December 2014. In 2015, the central bank again raised the key rate five times to 14.25%, the highest level for almost six years. The key rate has remained unchanged since.

For the latest detailed housing market analysis of individual regions and countries, check out the Global Property Guide’s global survey for Q2 2016.