Brazil Powerhouse for Property Investment
Successful property investment is all about choosing a location that brings together the right ingredients for price growth and high returns. All these ingredients can be found in the booming Brazilian real estate market.
Latin America is fast emerging as an area to watch for overseas property investment. But not all nations within this continent are equally promising. According to PricewaterhouseCoopers (PWC), Mexico and Brazil are the countries with “the biggest potential”. However, when it comes to real estate, Brazil is the “powerhouse” since Mexico’s economy is suffering serious effects from the downturn in the US economy.
PWC recently published its annual Emerging Trends in Real Estate report. The section dedicated to property outside the US and Canada focuses on Brazil. One source quoted in the report says that Brazil is the place that offers “real estate value drivers”. These drivers are a growing property market, a rapidly growing middle class – Brazil’s middle class accounted for 53.2% of the population in 2009 – and a huge supply of resources.
Brazil’s privileged position as a powerhouse for property investment is boosted by numerous other factors. Controlled inflation is one of them – Brazil has successfully reined in its inflation rate to just over 4%, no mean feat for a country that once experienced 2,500% inflation. Unlike many developed nations, the phrase ‘credit crunch’ is practically unheard of in Brazil where mortgage lending increased by nearly 80% in the first nine months of last year.
In addition, Brazil has a diversified export market with an emphasis on agricultural commodities, cars and energy. Not to mention the vast offshore oil reserves about to be exploited.
PWC commentators earmark residential housing as the best bet for investment in the Brazilian property market. According to the report, “markets are underserved and the growing population desperately requires more apartments and single-family homes”.
Part of this demand will be met by the massive government social housing programme, Minha Casa, Minha Vida, which aims to build 1 million low-cost homes throughout Brazil by the end of this year. However, this will satisfy only some of the demand. PWC believes that “demand is locked in” and that those making investment in Brazil property can expect 25% to 30% returns.
Seen from a continental perspective, Brazil has no serious competitors bar Chile although PWC points out that Chile’s small real estate markets restrict investment possibilities. Neighbouring Argentina offers few promising prospects for property investment due to endemic political problems, high inflation and poor domestic demand.
Colombia has potential but the report believes it needs to make more progress economically – Colombia lags some five to ten years behind Brazil. Peru is perhaps a rising star and has a fast-growing economy, but lacks the maturity of Brazil. And political problems make property investment in Venezuela a no-no.
Brazil is therefore the top favourite. But PWC cautions against hasty and uninformed property investment. “You can’t just parachute in, make investments and have success without local partners,” warns the report.
As with all property investment, success comes with local knowledge and expertise, something Obelisk’s established presence in Brazil can provide. Several years of investment in the area means Obelisk has acquired the necessary know-how and reputation to facilitate successful investment in Brazil. In addition, Obelisk has created a trusted network of associates in Brazil, also essential to ensure that this investment “powerhouse” delivers the goods.
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk on 0034 952 820 319.
Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at www.absoluteguideseries.com.
Contact us via email: info@obeliskinternational.com or visit our website: www.obeliskinvestmentproperty.com.
Latin America is fast emerging as an area to watch for overseas property investment. But not all nations within this continent are equally promising. According to PricewaterhouseCoopers (PWC), Mexico and Brazil are the countries with “the biggest potential”. However, when it comes to real estate, Brazil is the “powerhouse” since Mexico’s economy is suffering serious effects from the downturn in the US economy.
PWC recently published its annual Emerging Trends in Real Estate report. The section dedicated to property outside the US and Canada focuses on Brazil. One source quoted in the report says that Brazil is the place that offers “real estate value drivers”. These drivers are a growing property market, a rapidly growing middle class – Brazil’s middle class accounted for 53.2% of the population in 2009 – and a huge supply of resources.
Brazil’s privileged position as a powerhouse for property investment is boosted by numerous other factors. Controlled inflation is one of them – Brazil has successfully reined in its inflation rate to just over 4%, no mean feat for a country that once experienced 2,500% inflation. Unlike many developed nations, the phrase ‘credit crunch’ is practically unheard of in Brazil where mortgage lending increased by nearly 80% in the first nine months of last year.
In addition, Brazil has a diversified export market with an emphasis on agricultural commodities, cars and energy. Not to mention the vast offshore oil reserves about to be exploited.
PWC commentators earmark residential housing as the best bet for investment in the Brazilian property market. According to the report, “markets are underserved and the growing population desperately requires more apartments and single-family homes”.
Part of this demand will be met by the massive government social housing programme, Minha Casa, Minha Vida, which aims to build 1 million low-cost homes throughout Brazil by the end of this year. However, this will satisfy only some of the demand. PWC believes that “demand is locked in” and that those making investment in Brazil property can expect 25% to 30% returns.
Seen from a continental perspective, Brazil has no serious competitors bar Chile although PWC points out that Chile’s small real estate markets restrict investment possibilities. Neighbouring Argentina offers few promising prospects for property investment due to endemic political problems, high inflation and poor domestic demand.
Colombia has potential but the report believes it needs to make more progress economically – Colombia lags some five to ten years behind Brazil. Peru is perhaps a rising star and has a fast-growing economy, but lacks the maturity of Brazil. And political problems make property investment in Venezuela a no-no.
Brazil is therefore the top favourite. But PWC cautions against hasty and uninformed property investment. “You can’t just parachute in, make investments and have success without local partners,” warns the report.
As with all property investment, success comes with local knowledge and expertise, something Obelisk’s established presence in Brazil can provide. Several years of investment in the area means Obelisk has acquired the necessary know-how and reputation to facilitate successful investment in Brazil. In addition, Obelisk has created a trusted network of associates in Brazil, also essential to ensure that this investment “powerhouse” delivers the goods.
For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk on 0034 952 820 319.
Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at www.absoluteguideseries.com.
Contact us via email: info@obeliskinternational.com or visit our website: www.obeliskinvestmentproperty.com.
Labels: Brazil, Brazil property investment, Brazilian real estate, BRIC, emerging markets, investment, property
posted by Alison Kane at 5:04 pm
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