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"Massive" investment in Brazilian property reported

Date added: 29th March, 2011 at 10:32
(view all articles from March, 2011)

It has been reported that there is "massive" amount of money being ploughed in to the Brazilian property industry.

A release from analysts RNCOS showed that there is great and increasing demand for real estate, mortgage finance and affordable housing projects, which may include Minha Casa, Minha Vida (My House, My Life).

The report, entitled Brazil Housing Sector Analysis, said there has been "tremendous growth" in the country's property market in recent years, predicting that the home constructing industry could surpass other sectors in terms of how much it contributes to national gross domestic product expansion.

Investment in Brazilian property is particularly focused on affordable housing projects at the moment, the company stated, noting that cash is coming in from both private and public interests.

Some of the factors that have encouraged speculators to enter the market are "the government's commitment towards the development of housing industry and favorable policy framework," the report continued.

Meanwhile, mortgage laws are instrumental to the expansion of the housing industry, RNCOS said, explaining that with increased access to credit, more people are looking at buying property.

The company expects that the demand for houses will rise to about 1.8 million units by 2014, asserting that its growth is unlikely to falter, despite economic difficulties in other countries, as it is "well-shielded" from the financial downturn.

One firm taking advantage of the number of Brazilians looking for homes is Mexican house builder Desarrolladora Homes, with chief financial officer Carlos Moctezuma saying affordable housing projects in the country are presenting good investment opportunities.

"Brazil is twice the size of Mexico in terms of population. It probably has three or four times the need for housing, because this market has been unattended for the past 20 years,” he told Bloomberg.

Mr Moctezuma said his company would continue increasing its operations in Brazil, planning to build nearly six times the amount of domiciles it constructed in the nation in 2009, noting that strong economic growth and falling interest and inflation rates provide good conditions for property investors.

The government aims to create around two million homes for low-income people by 2014, while around 21 million individuals were lifted out of poverty while former president Luiz Inacio Lula da Silva was in power, the news provider noted.

Mr Moctezuma spoke of the benefits of aiming investment at this socially mobile demographic.

"The more important players in the Brazilian housing market will be those who have a broader geographic footprint attending the affordable-entry level," he explained.

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