J
JMBroad
New Member
It has, to some extent affected the sale of developments geared towards second homes for non-Brazilians however it hasn't affected the local market, which is the real driver for price and demand increases. Developments which cater to the local market have, if anything, seen an increase in interest from overseas investors looking to then resell to the local market on completion.I had been looking to invest in Brazil over the last few years, but like many, we just no longer have the money available to do so. With all that's going on in Europe, I find it hard to believe that the Brazilian real estate market hasn't been fazed by any of this. Even if I had money, I'd be on the sidelines for now, waiting to see some evidence of an improved economic situation in Europe and/or the US before buying an investment property in Brazil. Now, if I were looking for a primary residence, I'd probably jump on in. Better to be there and where I want to be than sitting here waiting to be able to begin the rest of my life.
Two snippits from the local newspaper today which give a good idea of what I'm talking about: (The English text is mine - not a direct translation, however the content of the articles back up my text)
Interest rate lowest since 1997
While historically the interest rates in Brazil have been extremely high, with figures as high as 38% and 45% a mere ten years ago, these figures have consistently been dropping until late in 2008 as the global economic turmoil hit the rest of the world and the Brazilian economy took some cautious steps in anticipation of any ripple effects. In September 2008 the Selic increased from 11.75% , the lowest it had been since 1997 to 13.75%. Today, through the market research group Focus and with the Selic rate steady at 12.75%, the Central Bank of Brazil announced a drop of 1% in March with an estimated further cut of 0.75% in April, which will bring the Selic rate back down to 11%. This comes at a time when consumer confidence in Brazil is already high.
Mercado prevê corte da Selic em 1 ponto percentual - Tribuna do Norte
Loans at an all time high – Mortgage market expands
The total amount of money which has been made available to developers and to individuals looking to purchase homes in Brazil has surpassed R$ 30.000 billion, according to ABECIP. A noticeable jump when compared to the R$ 18.282 billion of the year before, which was already a growth of 64.4% compared to 2007.
In the state of Rio Grande do Norte in January and February of 2009 alone, through the bank Caixa Económica, 920 loans have been signed to private individuals, with a total of R$ 33 million. Developers likewise have received loans of R$ 32 million, with an additional R$ 52 million already under negotiation for a further four real estate developments in the region.
This year the bank Caixa Económica is going to focus on expanding their mortgage product in Brazil, as the construction industry is a good stimulator of job growth, income and wealth distribution. Their objective is to demystify the mortgage industry and simplify the process, decrease significantly the interest rates and extend the durations of the loans up to 30 years.
Crédito para construção civil no RN está em alta - Tribuna do Norte
So with the options at the moment in Europe being to keep the money in the bank at extremely low interest rates or to place the same money overseas in a market like Brazil, many investors are deciding it may well be safer to invest in something which there is a real demand for and which is likely to increase over the next 6-12 months. The chances of that money earning anywhere near the same amount in Europe sitting in a bank or in real estate there are, as far as I can see, very slim - wouldn't you agree?