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| Destinations >> Brazil >> Brazilian Property Market |
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A massive, fast-emerging middle class grew by 7m last year and is predicted to boost property prices enormously. It is hardly surprising that current research suggests a property market very much on the rise. With a shortage of 8 million homes, Brazil’s housing market is seriously underdeveloped. It is estimated that in the next fifteen years, population increase and a strengthening economy could push that figure as high as 27 million. Fast-rising domestic wealth is coupled with aproactive government that’s making a serious investment in the country’s economic security, tourism and infrastructure. Tourism in Brazil has been up twenty percent over the last eight years and is expected to keeping growing, with all this growth it is expected to create a huge demand for resorts, vacation villas and holiday homes. With the Brazilian government’s recent investment of millions of dollars in the country’s tourism industry they are hoping to reclaim their city and stimulate the Brazil real estate market. It is relatively easy for foreigners to purchase Brazil property and the right of freehold for foreign nationals is incontrovertible. As a long-term investment, the entire area of North Eastern Brazil is considered highly promising. Property prices in North Eastern Brazil have grown 20% year on year for the past three years and there is no indication they are slowing down. Currently capital gains tax in Brazil is applied at 25%. But if a foreign national withdraws capital from the country, the rate reduces to 15 per cent. Top Reasons on Why to Invest in Brazil 1. 5th biggest country in the world in population & landmass and predicted by Goldman Sachs that Brazil will be one of the five biggest economies in the world by 2025 at the current rate of growth thus turning Brazil into a giant of the global economy which will result in high rates of growth in the real estate market. 2. Diverse culture and landscape, 3200km of beaches, wide range of attractions and a booming tourist market. 3. Yearly temperatures of 26-32ºC giving 12 month rental potential therefore one of the most promising tourist and second home destinations in the world. 4. Political and economic stability in respect to the rights and contracts of foreign companies makes Brazil a rock to international investors.Brazil already has achieved “investment grade” by the international ratings agency Standard and Poor´s. 5. Stability in the economy and control of inflation and an increasing middle class Due to a housing deficit of 7.9million units,(shortage of 8million homes) there is a necessity of construction of more than 1.4million units per year. Emerging middle class 6. Opportunity to build and sell to locals as a second home or to rent properties as a holiday home. 7. Fast growing domestic wealth is coupled with a proactive government that’s making serious investment in the countries economic security, tourism and infrastructure. Brazil’s economy is growing at a rate of 5% a year. 8. The value of Brazil’s land has been kept low by limited availability of finance and credit. Not easily available but is now becoming more common. With only 2% of the population with mortgages. Now 30 year mortgages are available at rate of 13% to 14% . This will boost house prices. 9. Mortgage penetration under 2%- UK 70%, Mex 14%, Chile 14%, China 14% 10. Reduction in interest rates has generated a sequence of records of real estate financing that should go from 2% of the GDP to 12% in 2014 11. Brazil is now the eighth biggest oil producing nation in the world and is almost completely self sufficient therefore bucking the current global recession 12. Cost of living 40% cheaper than the USA with low fuel costs. |
