Property Futures

Real Estate News, Reviews and Investment

Cooling real-estate prices lure investors to Brazil

News: from high to steady housing price levels in Brazil.

Brazil has experienced two phases of real-estate activity. Since 2008, it went through a dramatic growth phase marked by high housing demand and generous bank loans.  The confluence led to property prices soaring to astronomical levels gradually tapering off in 2011.

 

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The period of intense real estate activities

The state of the Brazilian real-estate environment since 2008 was characterised by certain trends that had experts worried about its astounding upward growth.

 

Poignant characteristics of the local housing boom

  • Demand for housing sky-rocketed, sparked by domestic buyers eager to becoming house owners and investors in real estate.
  • Banks added to the heightened demand by lending money with abandon.
  • With the country tipped as the venue of the FIFA World Cup and the Olympics, Rio became the focus of real estate development making it the most expensive city to live in.
  • The buying frenzy of property caused real estate prices to soar by an average 140%.

The cooling down of real-estate activities

The uptrend in real-estate prices appeared to have settled in 2011. One of the major tempering influences was the slackening of demand for Brazilian commodities by China.

 

Views on the change to stability

  • President of the Patrimovel real-estate agency, Ruben Vasconcellos, predicted a fall in real-estate prices, of between 25% and 30% during 2011, as a result of reduced demand. The demand reduction in turn, forced real-estate agents to lower prices, to stimulate the market.
  • Analysts believe the real-estate market is entering a new phase that investors find attractive.
  • Real-estate speculators also believe the Brazilian market has matured during the period of intense growth as it catered for both international and local investors offering services and real-estate floor space.
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