Why Brazilian Real Estate Prices Will Keep Going Up? | Obelisk International

It’s no secret that the Brazilian real estate market is booming. For many analysts, this is just the beginning of a long positive cycle for property in Brazil accompanied by steadily rising prices.

A recent article in the business magazine Exame looks at the many reasons why prices for real estate in Brazil will continue to rise. All the reasons indicate price rises are here to stay providing a compelling argument for property investment in Brazil.

Property Price Adjustment

According to Exame, house prices in Brazil have only just started to catch up with inflation. Their previous prices lagged behind inflation levels and the recent increases prove that there has been some very necessary price-adjustment in the Brazilian property market.

Exame quotes a recent study by JP Morgan into property value and income ratios. The study finds the value of property in Brazil is around 5.5 times the average annual income. In countries like China and Singapore, this rises to 11 times the average income showing there’s plenty of room for house price growth in Brazil.

Supply and Demand Drivers

One of the biggest drivers behind the boom in Brazil property is the huge demand for housing. This demand is apparent at all class levels and at the lower end, the social housing programme, Minha Casa Minha Vida is helping to address the problem.

Many real estate experts believe the Minha Casa Minha Vida programme is playing a large part in the current property boom in Brazil. The launch this week of the second phase of the programme – building 2 million properties in Brazil by the end of 2014 – has undoubtedly boosted the housing market still further.

Then there’s the lack of supply. This is highly visible in all sectors and Exame looks at the commercial real estate sector in Brazil where the shortage is particularly acute. The article finds that Brazil urgently needs new construction of all types of commercial property, particularly offices where vacancy rates are at all-time lows.

Funding for Brazilian Real Estate

While the take-up on mortgages in Brazil has grown rapidly over the last few years, the total loan rate still represents a fraction of the country’s GDP. Exame calculates that loans for property in Brazil currently stand at around 5% of GDP – Mexico and Chile come in at 11% and 18% respectively.

Brazil’s funding system means that here, too, there is plenty of room for growth. Maximum loans on Brazilian real estate are usually 65% and mortgages short term (15 years). Added to the buoyant mortgage market is the abundance of capital market alternatives. Analysts believe that Brazil has ample scope to bring in large-scale securitization over the next few years.

For Obelisk International, the Exame article highlights the fundamentals behind the Brazilian property market. The fact that these fundamentals are simultaneous and set to continue for the medium term underlines the huge potential for property investment in Brazil. The article also confirms Obelisk International’s belief that with price rises here to stay, now is the time to invest in Brazilian real estate to obtain maximum benefit from these increases.

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Big Potential for Investment in Brazil’s North East | Obelisk International

As Brazil consolidates its position as a leading emerging market, north east Brazil is attracting big investment attention. For The Economist, the region is a hive of opportunities for Brazilian investment.

Containing eight states including Ceara, Piaui and Rio Grande do Norte, north east Brazil occupies around 18% of Brazil’s land mass and is home to 28% of the population. It’s the poorest area of Brazil, but spectacular economic growth over the last decade has made it a favoured spot for investment in Brazil.

With annual average GDP growth of 4.2% since 2002, north east Brazil has an impressive economic record. For The Economist, the region is “Brazil’s star economic performer”. The great strides made by Brazil to reduce poverty have been particularly effective in north east Brazil.

Multinational Investment Interest

Since 2003, the minimum wage has grown by 60% and according to The Economist, this increase in purchasing power stands out in north east Brazil. And the new north east Brazilian buying clout is attracting the attention of big-name investment in Brazil.

The food and beverage giant, Kraft Foods opened its first factory in north east Brazil in April and Fiat is in the process of building a car factory with a total investment of R$3 billion. Since 2006, a total of 52 shopping centres have opened in this area of Brazil, giving an idea of the consumer potential in the region.

Once a region workers were forced to flee from, north east Brazil is now attracting labourers and many migrants are returning home. Massive investment in Brazilian real estate and infrastructure in the area has even led to labour shortages, particularly in civil construction.

Infrastructure Building

But the biggest focus of investment in this part of Brazil is on infrastructure. Both government and private investment projects are underway in the region. Construction activity is so busy in the area that the federal Integration Minister, Fernando Bezerra claims that “right now, the north-east is one big building site”.

Infrastructure investment includes the Atlantic coast highway and the port and industrial complex at Suape. Near Suape, the southern hemisphere’s largest shipyard is under construction, indicating the scale and importance of north east Brazil investment. Rail links for freight are also being built.

North east Brazil still has ground to cover to catch up with the richer southeast regions, but all the signs are that this part of Brazil is well on the way to economic prosperity. Low unemployment, rising wages and the provision of housing through the Minha Casa Minha Vida programme will ensure north east Brazil continues to progress.

Obelisk International is well aware of the huge opportunities available in north east Brazil, an area we pinpointed for its exceptional potential for growth. The area’s new-found prosperity makes it ideal for investment in Brazil. The population’s rising purchasing power also makes north east Brazil perfect for real estate investment, right across the property spectrum - from social housing to high-end luxury.

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Retail Investment in Brazil Tops Index | Obelisk International

When it comes to retail investments, Brazil has the highest market potential among 30 developing countries. And investment in Latin America retail opportunities dominates the rankings.

AT Kearney’s annual Global Retail Development Index is topped by Brazil with Uruguay and Chile in second and third places. This dominance of Latin American investment in retail indicates the potential to be found in the continent.

The 2011 Index reflects the change in global investment direction over the last year. The Index reports that “developing markets now drive the agenda in global arenas” with a clear advantage for South America. Continued growth and “lack of investment fatigue” has made investment in Latin America a favourite with retailers.

Brazil is Best Retail Investment

Brazilian investment tops the Index, a climb of four places from the 2010 edition and an impressive hike from the bottom of the first Index in 2002 when Brazil ranked in 30th position. For AT Kearney, retail investment in Brazil is backed by an expected GDP growth of 5% over the next few years, a “large and mostly urban population” and massive retail sales.

The forthcoming sporting events are highly influential in so many areas for investment in Brazil and retail investment is no exception. AT Kearney cites the 2014 World Cup and 2016 Olympics are two factors behind retail potential because of the significant investment in Brazil planned for both events.

The Index notes that retail investment in Brazil “is on the rise”, driven by strong consumer demand and high spending. Several prominent foreign brands are about to move into Brazil such as Debenhams, H&M and Topshop, while Burberry entered Brazil last year.

Explosion of Shopping Malls

Major Brazilian real estate investments are also responsible for retail growth, particularly shopping centres. The rise in the number of shopping centres in Brazil has been spectacular over the last two years – for AT Kearney, shopping centres “have exploded”.

Shopping centres make up some 20% of all retail sales in Brazil and are increasingly popular with Brazilian consumers. 25 shopping malls opened last year and 30 more are planned for this year.

More than half the centres have been built in the south east of the country, home to a sizeable percentage of the Brazilian population. However, the south east is not the only area with retail investment potential. According to AT Kearney, there is “future opportunity for additional real estate investment in the north and east of Brazil”.

For Obelisk International, Brazil’s top ranking in the Retail Development Index comes as no surprise. The meteoric rise of the middle classes – an ongoing process – carries endless opportunities for Brazilian investment and retail is no exception. Obelisk International expects Brazil’s potential to expand still further as the country consolidates its economic and social position within global investment destinations.

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Excellent Quarter for Brazilian Investments | Obelisk International News

Brazil has just published its economic results for 2011’s first quarter. Highlights include a GDP growth of 1.3% and an 8.8% increase in investment in Brazil.

The 1.3% growth for the first three months of this year came as no surprise to analysts who continue to predict a healthy 4% for Brazil’s annual GDP. The fastest-growing sectors over the last quarter were Brazilian agriculture with a quarterly gain of 3.3%, followed by industry with 2.2%.

Year-on-year figures show a 6.2% increase in Brazil’s GDP. Top performing sectors over the last year include industry (7.4%) and services (4.9%). Within industry, mineral extraction and civil construction were the largest growing sub-sectors since Q1 2010.

Civil construction grew by 9.2% in the year to April 2011. This huge increase was driven by intense activity in the Brazilian real estate market, particularly within the social housing programme, Minha Casa Minha Vida. The building and upgrading of infrastructure for the 2014 World Cup and 2016 Olympics is also another factor behind the rise in construction in Brazil.

Big Investment in Brazil

As well as strong internal demand, the last year has seen big investment in Brazil. Brazilian family spending grew by 6.4% over the last 12 months, reflecting the rise in employment and wages. Strong household consumption is a major attraction for multinationals investing in Brazil.

In terms of Brazilian investment spending, figures increased by 8.8%. According to the Brazilian Statistical Agency (IBGE), this was due to the expansion of imports and the rise in manufacturing.

For government and Central Bank analysts, the latest quarterly figures show that GDP growth is steady. Quoted by Bloomberg, the President of Brazil’s Central Bank, Alexandre Tombini said that the Brazilian economy was now expanding at “a rhythm that is more consistent with internal and external equilibrium”.

Q1’s steady economic growth shows that government measures to rein in inflation are working. The policies of tightening public spending and raising interest rates are set to continue at least until the end of this year to allow Brazil to keep inflation under control.

For Obelisk International, the latest economic figures reiterate Brazil’s potential as an investment destination. Steady and controlled growth is an essential ingredient for successful investment anywhere and Brazil is showing every sign of a maturing market. Obelisk International believes this confirms the excellent future for Brazilian investments.

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Brazilian Real Estate Better Investment Than Gold | Obelisk International

2010 was an outstanding year for investments in Brazil, particularly real estate and commodities. And investments in Brazilian property made higher profits than investment in gold.

Commodity investment in gold was an investor favourite last year when the value of the precious metal reached unprecedented levels. But if you invested in Brazilian real estate the chances are that you would have made bigger profits than the gold buyers.

Big Profits in Rio and Sao Paulo

Figures recently released by the Rio de Janeiro building union (Secovi-Rio) point to considerably higher profitability in property in Brazil than gold. Secovi calculates that Rio de Janeiro property saw a rise in value of 50% in 2010, some 18% higher than gold investment.

While 50% was a city average, some areas of the 2016 Olympic destination experienced exceptional returns. One-bedroom apartments in central Rio increased in value by 70% while other districts topped 90% profit for property investors.

Returns from real estate investment are also high in Sao Paulo. In the city generally, real estate rose by 34.4% last year, but launch prices for one-bedroom luxury apartments went up by a massive 71%. And it was not only buyers of real estate in Brazil who reaped big returns – investors letting Sao Paulo properties also made tidy profits. Residential rentals rose by an average of nearly 14% in the city with annual rental returns coming in at just under 48%.

Commercial Property Riding High

But the big story in Brazilian real estate is not just about residential property investment. Commercial property is also riding high on the back of a booming economy and record foreign investment in Brazil.

A recent survey by Colliers International finds Sao Paulo office property is at its lowest vacancy rate for a decade. The rate of 1.2% in 2010 reflects the imbalance of high demand and short supply. This imbalance continued into Q1 this year when the vacancy rate for quality office space in Brazil’s financial capital fell for the sixth consecutive quarter.

Despite the delivery of offices running to 30,000 square metres in 2010, high demand pressure continues. In Q1, rents for office property in Sao Paulo rose by 7.6% and Colliers International found that in ten regions of the city, high-grade office rentals were 50% higher than the market average.

Investors in Brazilian property with Obelisk International last year also saw high profits. Our market research indicates that returns from real estate in Brazil should continue to outpace other investments for the next few years. For Obelisk International, residential property has the best potential, particularly in sectors catering for the new middle classes where supply is unlikely to satisfy demand for at least the next 10 to 15 years.

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Brazilian Real Estate on 15-year Cycle | Obelisk International

Brazilian real estate is entering a period of sustained growth likely to last 15 years. This very positive scenario makes investment in Brazilian property a must for any portfolio.

In a recent interview, Fabio Nogueira, the founding partner of Brazilian Finance and Real Estate (BFRE), claims that the market for property in Brazil is at the beginning of a long growth cycle. For the founder of BFRE (whose partners include property mogul, Sam Zell), ingredients are in place for this cycle to last between 10 and 15 years.

For Mr Nogueira, the Brazilian real estate market has changed fundamentally over the last few years. He points out that property cycles in Brazil were historically short because of financial volatility and economic instability. Erratic conditions meant that cycles within the Brazilian property market rarely lasted for longer than three or four years.

New Scenario for Brazilian Property Market

This scenario has completely changed and the market now has conditions in place for sustained growth. Mr Nogueira believes the market for property in Brazil now brings together two essential conditions.

The first condition is well documented – the huge shortage of housing in Brazil, particularly apparent in the lower social classes. Estimates on the actual number of houses needed to satisfy the demand for property in Brazil run between 7 and 13 million. Some market studies (including Ernst & Young) have found that the shortage will last until 2030.

The second characteristic of today’s property market is a more recent phenomenon. Brazil’s current economic strength and stability have led to greater prosperity for all Brazilians. And for the first time ever, many Brazilian families can seriously aspire to homeownership. Not for nothing does the government social housing programme Minha Casa Minha Vida mean “My house, my life”.

Stable Future

For the majority of Brazilians, the purpose of buying a property is to live in it. Property investment rarely comes into the picture and Mr Nogueira points out that most speculative Brazilian investment is made in the financial sector. He believes that because Brazilians are buying a home, they have much more at stake personally and financially, which adds stability to the Brazilian property market.

Further stability is added from the Brazilian mortgage sector. Mr Nogueira dismisses the idea of a credit crisis in Brazil because of the strict lending criteria in place. Most properties need a deposit of up to 40% and bank regulations mean borrowers may only allocate 30% of their income to spend on rental or a mortgage for their property in Brazil.

Obelisk International shares this positive outlook on the Brazilian real estate market. Company in-house research suggests sustainable long-term growth conditions are now in place. With this mind, Obelisk International believes that investment in Brazil property also has a long-term future.

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Brazilian Investment Gets Credit Rating Boost

Investments in Brazil received good news when Standard & Poor’s upped Brazil’s credit rating. This rise comes hot on the heels of Fitch’s recent upgrade and confirms the excellent outlook for Brazilian investments.

Standard & Poor’s (S&P) has raised the credit outlook from stable to positive for Brazil’s foreign currency sovereign credit. This is a welcome move for Latin America’s largest economy and reinforces the general impression that the new Brazilian government has got off to an excellent start.

In their first five months in office, Dilma and her team have been working hard to attract foreign direct investment in Brazil and to keep inflation in check. The recent upgrades from two of the world’s largest credit rating agencies reward their efforts and prove they are on the right track.

What is more, one of the S&P authors of the report, Sebastian Briozzo, said that the recent rise in foreign currency sovereign credit opens the door to more upgrades in the very near future. Quoted in the Financial Times, Mr Briozzo stated that if Brazil “continues down the current path, the country’s credit rating could be upgraded to BBB”.

This step would add further security for Brazilian investments and reinforce Brazil within the investment market generally. For the Financial Times, another upgrade from S&P “would be an important stamp of approval”. For Obelisk International, it would confirm our belief in Brazil as one of the best investment destinations globally.

In the report, S&P also praise Brazil for diversifying its economy and for encouraging the growth of the middle classes. The rise of the Brazilian middle class is an important factor behind the country’s recent economic success and the essence behind many opportunities for investments in Brazil.

The new middle classes are responsible, almost single-handedly, for the huge demand for real estate in Brazil. This demand is the major driver behind the current booming property market. And the continuing increase in the number of middle class Brazilians will continue to drive demand forward for at least two more decades.

Obelisk International welcomes the latest credit upgrade for Brazil and sees this as is the first of many as Brazil consolidates its international presence. We also believe it adds to confidence in Brazil as an investment destination.

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The Chinese Factor in Brazilian Investments

As world economic power gradually shifts towards emerging markets, Chinese investments in Brazil are booming. In 2010, trade between the two countries reached an all-time high and encouraging Chinese direct investment in Brazil is key to government policy.

The trade relationship between China and Brazil is relatively young, but the rate of Chinese and Brazilian investments has grown exceptionally fast. Exports from Brazil to China multiplied by 18 between 2000 and 2009 when China became Brazil’s largest trading partner. In 2010, when China was the nation making the biggest direct investment in Brazil, trade grew by a massive 53%.

This rapid growth is attracting attention. In a recent article, the Financial Times states that “few doubt that the world is witnessing the birth of one of the great commercial relationships of the future”. And many analysts believe that the Brazil-China tandem will play a major role in foreign investment worldwide in the future.

For China, Brazil is a “one-stop shop” for commodities. Latin America’s largest country is hugely rich in resources and China snaps up Brazilian iron ore and agricultural produce. More recently, Brazil’s huge oil fields have caught the attention of many foreign investors with the Chinese at the top of the interested parties in this particular Brazilian investment.

However, it isn’t all plain sailing in the China-Brazil investment relationship. The two giants are not only at opposite ends of the globe geographically – they are also a world apart when it comes to politics, culture and social structure. And these differences have led to some friction.

Cheap Chinese imports fuelled consumption among Brazil’s lower middle classes, contributing in part to recent economic growth in Brazil. However, the vast influx of Chinese goods means some Brazilian manufacturers are worried about the future of certain sectors of Brazilian industry.

To counteract this, the government is working hard to attract Chinese investment in Brazil. One of President Dilma’s first foreign trips was to China and as a result, China will be making investment in Brazilian aircraft as well as setting up manufacturing centres in Brazil.

China is set to become the world’s most important economic player in the near future and Brazil is well placed to become part and parcel of this success. With Brazilian investments high on its agenda, China will also contribute to Brazil’s rise on the global stage. At Obelisk International, we expect to see a marked increase in Chinese investments in Brazil over the next few years, particularly in investments related to infrastructure for the forthcoming sporting events and Brazilian real estate.

However, Brazil’s trading strength lies in diversity and unlike some countries, it isn’t heavily dependent on trade with China. Although China represents an important trading partner, it only accounts for 15% of all Brazil’s international trade. For Obelisk International, this balance guarantees varied opportunities for investors of any nationality.

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Obelisk International - Minha Casa Minha Vida

Social housing is increasingly recognised as an important niche market within property investment. Social housing not only offers excellent investment opportunities but also allows investors to participate directly in reducing the shortage of property.

Brazil implemented its first social housing programme in March 2009 and since then, Minha Casa Minha Vida (My House, My Life) has expanded throughout the country. The programme’s objective is to build 3 million low-cost properties in Brazil by the end of 2014. With government funding of R$105.7 billion, this is the largest property investment in Brazil.

Obelisk International joined the Minha Casa Minha Vida programme as a developer in mid-2009. Developing social housing projects in north east Brazil, Obelisk International now has over 3,000 properties under construction and management. Investors in social housing projects in Brazil obtain high profits plus full capital return within a secure investment environment. For more information about Minha Casa Minha Vida investment with Obelisk International, please visit www.obeliskinternational.com.

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About Obelisk International

Obelisk International is one of the few European companies specialising exclusively in Brazilian investments. Obelisk International’s investments in Brazil are centred on the property market where some of the best opportunities for investment in real estate can be found.

With a network of associates and contacts in Brazil, Obelisk International is able to source exclusive projects within the Brazil property market offering exceptional returns as well as a secure investment. Recent investments include social housing projects – a niche market within Brazilian property investment – as part of the government backed social housing programme, Minha Casa Minha Vida.

Obelisk International has been part and parcel of real estate investment for the last ten years and has offices in the UK, Brazil and Spain. Our Brazilian office is situated in Natal, in north east Brazil, an area offering some of the best investments in Brazil. Obelisk International's business associates in the area ensure we can provide the very best investment opportunities. Find out more about Obelisk International by visiting our website, www.obeliskinternational.com.

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Brazilian Investment in Social Housing News | Obelisk International

The Brazilian social housing programme Minha Casa Minha Vida is evolving as it enters its second phase. The latest adaptations mean more Brazilian families will be able to benefit from this huge government investment in Brazilian real estate.

With the Minha Casa Minha Vida budget approved by the Senate for 2011, the government expects to see 300,000 homes delivered this year. This big injection into the Brazilian property market means the programme is well on track to fulfilling its objective of 3 million homes by the end of 2014.

More Benefits for Buyers

After announcing the budget approval, the Housing Secretary Ines Magalhaes also revealed the latest changes to the Minha Casa Minha Vida (MCMV) programme. Although these changes are small, they are highly significant – not just for Brazilian families but also for developers making investment in this niche sector of the Brazilian real estate market.

Low-income families are particularly targeted in the second phase of MCMV. 60% of social housing units will now be allocated to families whose monthly income is less than R$1,395. Subsidiaries of up to 95% are available with minimum monthly paybacks of just R$50 over 10 years. These exceptional terms will allow thousands of families to enter the property market in Brazil and fulfill their dream of owning a home.

Better Real Estate Investment

Conscious that the MCMV programme depends on companies building the units, the Brazilian government is keen to continue to attract developers of real estate in Brazil to the programme. To this end, the authorities recently raised the minimum prices on MCMV properties in Brazil to allow more flexibility in the market.

In addition, under the latest announcements, MCMV developments are no longer restricted to five storeys. This will allow for more units to be built, a particularly important consideration in areas of Brazil where building land is at a premium (e.g. Rio de Janeiro and Sao Paulo). Profit margins in this sector of real estate in Brazil will therefore be higher making social housing an even more attractive investment.

In addition, MCMV developments may house trade premises on the ground floors. Rent from these businesses would help finance communal costs of the developments as well as making the development more attractive to home buyers.

As a developer of MCMV, Obelisk International welcomes the latest changes to the programme. Obelisk International believes the combination of better conditions for buyers and more flexibility for developers will add considerably to the benefits for investment in Brazilian social housing. We expect to see even more interest in MCMV from investors over the next few months.

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Sotheby’s See Big Potential in Brazilian Real Estate | Obelisk International

For Sotheby’s International Realty, Brazilian real estate represents value. And the company highlights homes in the north east as Brazil’s top property investment.

In a recent visit to Brazil, the Vice-President of Sotheby’s International Realty, Peter Turtzo offered his thoughts on the situation of the Brazilian property market to the fortnightly business magazine, Exame. The interview covers aspects of real estate in Brazil such as price trends, the possibility of a bubble and the location of Brazil’s best value property.

Property Prices

On the subject of price changes, Mr Turtzo believes prices for property in Brazil will rise over the next few years in line with continuing job creation. He claims that prices are rising because the Brazilian government “is doing a great job in encouraging people to buy their own homes”.

A large part of this government stimulus comes from the social housing programme, Minha Casa Minha Vida, providing homes for 3 million Brazilian families. For Mr Turtzo, government activity has provided “a solid foundation for the Brazilian real estate market” because it starts a chain of purchases, which activates the property market at all price levels.

Future for Property in Brazil

When asked about the possibility of a bubble forming in the Brazilian property market, Mr Turtzo made it clear he believes this isn’t the case. For Mr Turtzo, Brazilian banks are not making the same “foolish mistakes” made by banks in developed countries where homebuyers “only needed to prove they were alive to get a loan”.

Mr Turtzo sees completely different credit standards and requirements in Brazilian banks. He is therefore confident that Brazil will not suffer the same problem that led to the creation of a real estate bubble in other countries such as the US, Spain and Ireland.

Best Property Investment in Brazil

When asked which is the best location in Brazil for property investment, Mr Turtzo claims north east Brazil represents the best value. Here, prices per square metre are “very attractive”.

During his worldwide tour of Sotheby’s International Realty offices, Mr Turtzo has seen big interest in foreign investment in Brazil. He has noticed how the world’s perception of Brazil has changed since Brazil was awarded the World Cup and Olympics.

However, although Mr Turtzo sees interest in Brazil from foreign buyers, he believes that the main demand for real estate in Brazil comes from the Brazilians themselves. Obelisk International market research confirms this belief, also upheld by other analysts of the Brazilian property market. Brazil’s huge population with its ever-increasing purchasing power is both a massive driver of demand for homes and the creator of excellent opportunities for real estate investment in Brazil.

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Diversity is Key to Brazilian Real Estate Investment | Obelisk International

With strong driving forces behind it, there’s every sign that the Brazilian real estate market is set to continue to boom. In this scenario, the key to the investment in property in Brazil is diversity.

With record levels of construction and foreign investment, Brazilian property is experiencing rapid expansion. This growth means both prices and returns on investment in Brazil are rising. What is more, these high prices and returns can be found across the whole spectrum of real estate in Brazil.

Brazil’s residential property market is seeing steady price hikes, particularly in the largest cities and the north and north east regions. On the Brazilian commercial property front, rentals of offices in Sao Paulo, Rio de Janeiro and Brasilia are at their highest ever, particularly at the high end of the market. ‘A’ grade offices are expected to reach rental levels of R$200 per square metre per month this year. Record rents are also forecast for units for industrial and logistical use.

Future Trends for Brazil Property

Analysts agree that the current expansion of the Brazilian real estate market is likely to continue because of the demand drivers in place. In a recent article, the Association for Mortgages in Brazil (ABECIP) highlights the huge potential in Brazil.

ABECIP points out that Brazil is a world leader in production of several commodities including iron ore and soya. The growing middle classes in Brazil need properties, goods and services. These factors together with the higher building costs and scarcity of land lead ABECIP to believe that prices for Brazilian real estate will continue to rise for at least the next three years.

ABECIP also points out that the Brazilian property market has two direct competitors putting pressure on prices. These are the government Growth Acceleration Programme, which includes the social housing scheme, Minha Casa Minha Vida, building 3 million homes by the end of 2014 and the forthcoming world-class sporting events.

Best Real Estate Investment

In this scenario of expansion and rising prices, ABECIP recommends diversity when investing in Brazilian real estate. The association advocates investment in a variety of products within the wide spectrum of residential and commercial property in Brazil. As different products have different potential and risks, this will ensure the investor spreads both risks and returns.

Obelisk International also recommends a varied portfolio for any investor in Brazil. Obelisk International’s latest product launch provides the chance to invest in five different products. Developed by the most successful real estate company in Brazil, all five products have been carefully selected and between them, provide an excellent opportunity to invest successfully in one of the world’s most buoyant property markets.

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Multinationals Choose Brazilian Investment | Obelisk International

When it comes to consumers and sales, the biggest multinationals are unanimous that investment in Brazil is their best bet. As Brazil gains international presence, more and more of the world’s largest companies are choosing Brazilian investments.

This week’s edition of the economic magazine Dinheiro, includes an in-depth article examining why multinationals are so keen on investment in Brazil. Entitled “The Paradise for Multinationals”, the article offers a long list of global giants who have seen spectacular advances in Brazilian sales since last year.

And the article makes impressive reading. Sales made by the Brazilian subsidiary of Whirlpool Latin America last year have made it the second largest operating company in the world, behind just the US. Whirlpool Latin America’s President, Jose Drummond expects an even better performance this year and forecasts Brazil will occupy third place in the sales of electrical appliances worldwide, ahead of Japan.

Brazil’s Top Ranking Multinationals

Like Whirlpool, Brazilian investment has brought huge dividends to the food giant, Nestle. Sales by their subsidiary in Brazil last year made it the second largest operation in the group. For Unilever, Brazil is also the second largest market.

For some multinationals, sales and investments in Brazil mean the Brazilian market has become their largest. This is the case of Avon, Santander and Bunge, the US agribusiness multinational.

Other movers and shakers on the Brazilian investments stage are Volkswagen who sold more cars in Brazil than in Germany in 2010 and Nivea whose sales in Brazil this year will exceed those in France and Italy. In the telecommunications sector, the Spanish Telefonica now has a Brazilian client base of over 76 million customers.

Record Foreign Direct Investment

Brazil saw record levels of foreign direct investment in 2010 when US$48.4 billion entered the country. Analysts expect this to increase by over 34% this year when foreign funds for investment in Brazil should total US$65 billion.

The reasons for Brazil’s popularity are obvious. Not only is the Brazilian economy performing well, but employment and wages are rising meaning that thousands more Brazilians join the middle classes every year. And these middle classes are big consumers.

“China may have over a billion inhabitants, but Brazil has 200,000 consumers,” says Ivan Zurita, President of Nestle in Brazil. These consumers have wide ranging tastes and a huge appetite for spending. Unsurprisingly, multinationals in Brazil are adapting their marketing and brands to cater specifically for this buoyant and discerning market.

For Obelisk International, Brazil with its booming economy and middle classes is an obvious destination for investment. Brazil’s huge - and growing - consumer market leads Obelisk International to believe that Brazil will continue to provide excellent potential for investment in the future for consumer goods across the board - from electrical appliances to real estate.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Keeping up with Brazilian Real Estate Boom | Obelisk International News

The Brazilian government has just introduced new training initiatives to ensure Brazil keeps pace with construction work. The volume of building in the Brazilian real estate sector is so high that around 500,000 more professionals are needed.

Huge investment in Brazilian property, from both private and government sources, means the industry is currently undergoing massive expansion. One of the challenges facing this boom in real estate in Brazil is keeping up with the supply of workers.

New Courses

According to the latest edition of ‘Valor Economico’, the government has just announced funding for construction skills courses to train 25,000 workers in basic building skills. To be held throughout Brazil, the courses will provide training for jobs such as brick laying, painting, plumbing and joinery.

Courses are also in the pipeline for training in preparation for the 2014 World Cup, also a focus of major investment in Brazil. These courses will concentrate specifically on tourism and transport, two key infrastructure areas of the sporting event. Over 25,000 Brazilians will benefit from this training. In total, courses will be in place for training around 80,000 people in construction in Brazil.

However, the current volume of building work in the Brazilian real estate sector requires a higher number of professionals. According to the Brazilian Employment and Business Ministry, 500,000 people need to be trained if Brazil is to keep pace with demand for properties. The Ministry’s Director for Training, Ana Paula da Silva, says the government is planning to introduce further initiatives to keep up the supply of trained professionals.

Booming Construction in Brazil

Property in Brazil is, along with the commodity and agricultural industries, one of the most buoyant sectors of the Brazilian economy. In 2006, Brazilian real estate construction employed 1.8 million people. This figure rose to 2.8 million in 2010 when the sector generated 320,000 jobs, 13% more than in 2009. Unsurprisingly, unemployment in construction in Brazil is virtually non-existent.

Obelisk International expect this trend to continue for the next few years as the building industry strives to keep up with demand for properties in Brazil. Figures recently released from the Statistical Agency show that the National Index for Construction rose by 0.52% in March. This translates into a year-on-year variation of 6.88%, confirming the ever-increasing volume in construction of infrastructure and real estate in Brazil.

Once again, north east Brazil had one of the highest regional increases in the monthly construction index. This part of Brazil is consistently showing a high volume of construction of properties and has been earmarked by many developers in Brazil, including Obelisk International, as a key area for Brazilian investment.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Huge Potential for Brazilian Real Estate in 2011 | Obelisk International

For the majority of sectors associated with Brazilian real estate, 2010 was the best year ever for investment in Brazil. And all sectors are unanimous in predicting further excellent business beyond 2014.

The latest issue of ‘Revista SFI’, published by the Brazil Mortgages Association (ABECIP), offers an in-depth analysis of the current situation in the Brazilian property market with detailed insight from sector experts. The article finds that all sectors linked to real estate in Brazil (bankers, developers, suppliers, unions etc) are convinced that the property market will continue to grow healthily over the next few years.

Brazilian Mortgage Levels

The President of ABECIP, Luiz França, predicts that mortgages in Brazil will increase by 51% this year based on GDP growth of 4.5% and the continued rises in both salaries and employment. Mr França points out that in 2010 the value of Brazilian mortgages increased as well as the number of units financed. “This shows that average house prices increased, reflecting the healthy state of the market,” he says.

For Jose Machado, the Director of Santander in Brazil, 2010 was the best year so far for the sector. He believes that “everything points to 2011 delivering similar results,” because of the acute lack of supply of property in Brazil and the current low credit levels. Other banks in Brazil such as Bradesco, Caixa (the largest provider of mortgages in Brazil) and Itau echo these predictions.

North East Brazil Ahead in Growth

Joao Crestana, President of the Sao Paulo union of real estate businesses (Secovi), also believes in the healthy state of the Brazilian property market. He underlines the country-wide growth but highlights the north east of Brazil as a region where real estate construction and transactions are growing at a higher rate than other regions.

The article also includes improvements that Brazilian real estate experts would like to see. Several interviewees feel it’s important that Brazil’s credit facilities grow to provide an alternative to government financing when the Minha Casa Minha Vida social housing programme ends in 2014. And several voice concern over the lack of building land in Brazil’s largest cities such as Rio de Janeiro and Sao Paulo.

The article interviewees conclude that the factors driving the property market in Brazil mean there is plenty of room for growth. The article states that the Brazilian real estate market currently accounts for just 4% of Brazil’s GDP and that by 2014 this figure will have increased to 11%.

For Obelisk International, this room for growth proves beyond doubt the huge potential for investment in Brazilian property over the next few years. Obelisk International believes 2011 will be an exceptional year for real estate investment across all sectors of society in Brazil, from low-cost social housing to high-end luxury properties.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Brazilian Real Estate on Show | Obelisk International

Obelisk International News - The recent Rio Grande do Norte property exhibition showed that Brazilian real estate has plenty of buyers. They are mostly from the upwardly mobile middle classes, confirming the potential for property investment in this sector of Brazil’s population.

The 10th Salao Imobiliario held in Natal expected over 35,000 visitors and to do real estate business worth R$500 million. At the show – the second largest exhibition of property in Brazil – prospective homeowners had the opportunity to look round 200 stands. Some 50,000 properties situated in the state of Rio Grande do Norte were showcased to visitors keen to buy property in this part of Brazil, home to a population of around 3.2 million. The majority of developments are located in and around Natal, the capital city.

A World of Real Estate in Brazil

The 5-day exhibition offered a snapshot of the Brazilian property market as a whole. Visitors were able to look at the many different investment options available and enquire about financing. Caixa Economica Federal, the largest lender of mortgages in Brazil and sole financier of the Minha Casa Minha Vida social housing programme, was present.

Catering for all budgets, prices for properties at the exhibition ranged from R$55,000 to R$4 million. A wide range of property types were also available – from low-cost social housing to luxury beach-front properties in Rio Grande do Norte’s best locations. Resale as well as new Brazilian real estate was on offer.

Middle Classes Main Target for Property

Brazil’s middle classes are the main drivers behind the market for property investment in Brazil. This was very apparent at the Natal property exhibition where the middle classes made up the majority of visitors.

Within Class C, the typical profile of prospective buyers was a couple aged between 20 and 35, and aspiring to buy their first home. Many are recently married and about to start a family. Within Class B (the upper middle class), buyers were looking to upgrade their home to a more spacious property with at least 120 square metres.

The Natal Property Exhibition also reflected the other driver behind the Brazilian property market – the housing shortage. The city has a deficit of around 24,000 homes and this together with the lack of available building land has made neighbouring cities such as Parnamirim very popular, particularly for Minha Casa Minha Vida developments.

Exhibitors at the property show were unanimous that the market for property in north east Brazil is booming, both for first-time buyers and for the more discerning buyer. Obelisk International’s market research in north east Brazil has confirmed this buoyant market, which offers plenty of opportunities for investment across a range of buyer budgets and preferences.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Minha Casa Minha Vida Leads Brazilian Real Estate | Obelisk International

Obelisk International News - Social housing investment led the Brazilian property market last year. Demand for construction materials and mortgages in Brazil reached record levels in 2011 and analysts believe that this year will follow suit.

According to a recent report from the Brazilian Association for the Construction Materials Industry (ABRAMAT), high investment in Brazil and the rise in household expenditure during 2010 led to the highest ever sales of building materials. Last year, demand for materials increased by 15.7% and prices rose by 16.3%.

Social Housing at the Forefront

Minha Casa Minha Vida, the government programme and the largest investment in Brazilian real estate, started in earnest last year and was a major contributor to the boom in construction in Brazil. In 2010, the first phase of the programme was completed and funding was provided for 1.15 million low-cost housing units with total credit levels of R$83.4 billion.

With numbers like these, it’s hardly surprising that social housing was responsible for a sizeable part of these hikes in demand and price levels. The Brazilian government is firmly committed to the Minha Casa Minha Vida programme, which will build 2 million homes by the end of 2014. Obelisk International therefore expects further pressure on demand for building materials this year.

Record Credit Levels for Real Estate

Brazil is currently breaking records almost monthly when it comes to mortgages. Last year’s figures were the highest ever and with a strong first quarter from January to March, there’s every sign that 2011 will set another record.

The Association of Brazilian Mortgages estimates that loans for buyers of Brazilian property will reach R$84 billion this year. Together with the mortgages provided by the government for Minha Casa Minha Vida buyers, the total amount loaned for purchases of homes in Brazil is expected to run to R$108 billion, almost 30% more than in 2010.

For Obelisk International, 2011 will undoubtedly be a record year for all aspects associated with the real estate market in Brazil. The drivers behind Brazilian property – increasing wages, rising population and a chronic shortage of housing – are so strong, we can only expect the market to get stronger.

With this in mind, Obelisk International forecasts record levels of foreign investment in Brazil, particularly in real estate this year as more and more investors appreciate the true potential behind the Brazil property market.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Dilma is Good News for Brazilian Investments | Obelisk International

Obelisk International News - 100 days into government, President Dilma Rousseff is proving to be good news for Brazilian investment. With high popularity, raised credit rating and record levels of investment, Brazil is flying high under Dilma.

After just over three months in office, Dilma is enjoying huge popularity among the Brazilians. Her rating as a politician is currently higher than her mentor’s, Lula when he started as Brazilian president.

Dilma’s levels of popularity mean many analysts no longer question her credibility. According to the latest edition of ‘Dinheiro’ financial magazine, “rather than standing in Lula’s shadow, Dilma is overshadowing her predecessor”.

Two Compelling Reasons

Brazilians have several compelling reasons to be more than happy with Dilma’s record so far. Fitch Ratings recently raised the rating for sovereign debt investment in Brazil from BBB to BBB+. At a time when several countries are seeing their investment ratings fall, this is an indication of the buoyant climate for Brazilian investment.

As well as an improved rating for investment, Brazil is experiencing record levels of foreign investment under Dilma. During the first quarter of this year, Brazil investment inflows exceeded outflows by a massive US$35.2 billion. This hike represents an increase of 46.2% on last year’s levels of investment in Brazil.

Challenges for 2011

The Brazilian economy is booming and now stands in 7th place in the world ranking. The increasing affluent middle classes, hungry for consumer goods, ensure the economy continues to drive forward. Jim O’Neill from Goldman Sachs, the inventors of the BRIC acronym, claims Brazil is the most popular of the four BRIC nations for investment.

But Brazil also faces challenges this year. Inflation must be kept in check and Dilma’s government needs to closely monitor exchange rate appreciation. Dilma has already introduced measures to deal with these challenges and as she moves into the second quarter of office, there’s every sign that these measures are taking effect.

For Obelisk International, Dilma and her government are undoubtedly making moves that favour investment in Brazil. As well as actively encouraging foreign investment, Dilma’s government is continuing with social programmes such as Minha Casa Minha Vida, which affords excellent opportunities for investment in Brazilian real estate.

Obelisk International has also experienced record levels of investment in Brazil so far this year, coinciding with Dilma’s first 100 days. And we expect to see much more investment over her next years in office.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Brazilian Investments with Obelisk International

Tipped by major financial analysts as one of the world’s hottest destinations for foreign investment, Brazil offers big opportunities. But to ensure maximum wealth and security from your investment in Brazil, you need to invest with the experts.

Obelisk International is one of those experts. Over the last few years, Obelisk International has gleaned specialist knowledge in Brazilian investments. This expert know-how means investors can be sure of superior returns and peace of mind.

For example, one of Obelisk International’s latest Brazilian investments offers 50% fixed profit for investments with an entry level of just €50,000 over two and a half years. This translates into a secured profit of 20% per annum, practically impossible to source anywhere else on the investment market.

Best Opportunities in Brazilian Real Estate

Among the myriad opportunities for investment in Brazil, property represents one of the best. Obelisk International’s market research has earmarked the Brazilian real estate market as the one bringing together fundamental ingredients for real growth and by extensive, plenty of investment opportunities.

The drivers behind the booming market for property in Brazil include a huge (and growing) demand for homes from all sectors of Brazilian society and a massive deficit of housing. Added to this imbalance of supply and demand are the Brazilian middle classes, one of the fastest growing in the world and with increasing affluence.

Against this background, Obelisk International has sourced a small number of select investments. A firm believer in only offering investors the very best returns and highest security, Obelisk International has handpicked a selection of exclusive investments for clients worldwide.

Investment in North East Brazil

All these investments are situated in north east Brazil, a location chosen for several reasons. This region is expanding fast in population, wealth and infrastructure. It’s also one of the most attractive and a regular favourite in any Brazil guide. North east Brazil is increasingly popular with both Brazilian relocators and holidaymakers, providing a ready-made market for Brazilian real estate.

In 2009, Obelisk International was one of the first European developers to enter the Brazilian government social housing scheme, Minha Casa Minha Vida. These investment opportunities have been so successful that Obelisk International currently has over 3,000 social housing units under construction and management with a value in excess of €100 million.

Latest Brazilian Investment Opportunity

Successful investment in Brazil is all about the right local partners. Obelisk International has always chosen its partners carefully and the latest project launch is no exception. The project is in partnership with the most successful developer of real estate in Brazil, adding infinite prestige and further security to this Brazilian investment.

This new project allows investors in Brazilian real estate to build up a portfolio encompassing a whole range of different property types and budgets. With a low entry level of €50,000, investors will achieve fixed profits of 50% plus full capital return over just two and half years.

When high and secure returns are few and far between, especially for the non-high net worth investor, Obelisk International with its expert knowledge on Brazilian investments is offering the perfect investment: returns of 150% in an investment with a high profile partner from just €50,000. Where better to put your money?

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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