The Property Investment Market in Brazil

Past, Present & Future

Foreign investment in Brazilian real estate is a relatively new concept, along with the access of financing for local residents. Until very recently property was almost unobtainable for Brazilian residents due to the country’s low wages, high amount of unemployment and mortgage interest rates at 25% being the highest in the world.

The conditions of the market and the overall poverty of the nation, lead to the construction of various shanty towns in the large cities with excessive crime. The turn-around in the market conditions has developed over the past 5 years with the changes in the government. Brazil has started to emerge as the country begins to develop the resources to enable its full potential.

Currently Brazil has the largest economy in South America, while ranking as the 9th largest in the world. The government has been focussing upon much needed housing and infrastructure, while also targeting tourism and increased encouragement towards foreign investment.

As the Brazilian economy is continuing to grow with strength, a middle class society is emerging with increased spending power. The mortgage interest rates have recently dropped dramatically to around 11%, enabling a new internal property market to emerge.

The encouragement to foreign investment and the tourism market has seen the recent development of the north-east regions of the country. Attractive to ever increasing numbers of holiday makers and buy-to-let investors, the low cost of land and housing has assisted with the booming emerging market opportunity.

Brazil has an exceptional potential for future growth in many areas of its economy and within the real estate market. As the idyllic north-eastern coastal areas continue to increase in demand, the prices will continue to rise. The interest rates for mortgages are predicted to drop further opening up greater potential to the internal purchasing power, with mortgage availability to non-residents is growing in demand. Brazil is also a nation rich in oil reserves and bio fuels, providing increased economic potential beyond solely relying upon the tourism market for financial growth.

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