BRAZIL’s Real Estate will stay strong in 2014
Over the past five years the BRAZIL’s Real Estate market has soared, especially in Rio de Janeiro with the World Cup and Olympics coming up. There is plenty of optimism for investors to be found with the high tourist season returning swiftly followed by the 2014 World Cup, despite fears of a devaluation and signs of it potentially levelling off in 2013.
The negative speculation was quashed by Teotonio Rezende, Caixa’s vice president (Brazil’s second largest government owned bank) who account for two thirds of real estate mortgages. He said that the market is simply readjusting to previous years depreciation with the rise and subsequent level-off in prices being purely a part of natural economic forces.
“Between 1984 and 2002, real-estate values depreciated,” Rezende said in an interview in Brasília. “There was economic stagnation, hyperinflation, wage loss, high unemployment. So what we’ve seen since then is a readjustment of prices recovering from that undoing.”
The market for property within the middle to upper classes is remaining strong, according to Cristiane Spercel, an analyst at Moody’s Investors Service, despite there having been reports of an increasing number of mortgage cancellations.
Even though the market has experienced a recent slowing of rental prices, from June’s 0.2 percent increase compared to a 1.6 percent increase every month in 2012 for example, industry insiders predict plenty of opportunity in 2014 for the Brazilian market.
James Lomas from Indigo Investments told The Rio Times that in terms of what to expect in 2014 “I think that prices will stay as they are now, fairly static but creeping upwards. I don’t believe there will be a crash or we have a bubble.”
Still, to help fuel growth, in October Brazil’s National Monetary Council approved an increase in the value of homes that workers can use their FGTS (a government-led unemployment insurance fund) to purchase a home. In Rio, residents can now use the money to help buy a home worth up to R$750,000, reflecting the surge in property values in the city.
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Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone communities of Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate services. Founded by Geoffrey McRae a New Zealander who maintains an active role in the business it has developed into an International team that has a well-deserved reputation for strong local knowledge, experience and professionalism. I hope you enjoy reading our news site. Please share it on your social media below.