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9.1 million waiting to buy homes in Brazil

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9.1 million waiting to buy homes in Brazil

With seven million Brazilians having entered the middle class in the past decade, it's little surprise that over nine million citizens want to buy a home in Brazil during 2011.  To take full advantage of this growing demand, global investors should turn to local experts with international links such as Brazil Bahia Property (IBBI).

The growth behind Brazil's housing demand

Thanks to former president Lula's vastly popular schemes such as Bolsa Familia, as well as the Minha Casa Minha Vida home-ownership scheme, millions are now able to afford a home in Brazil.

Government-backed Minha Casa Minha Vida has just garnered a further R$72 billion investment to complement the original 2008 input of R$64 billion.  By 2014, over three million homes will have been constructed and bought under the scheme.

The opening up of the domestic mortgage market offers a further window of opportunity as loans increase while overall debt remains safely low.

Brazil's housing shortage is compounded by a deficit of seven million properties, which will take 10-15 years to meet despite huge building projects such as Salvador's XX, currently the largest property development in the Americas.

A spokesperson from Price Waterhouse Coopers recently praised the Brazilian property market, commenting that  “you can build housing forever and people will want it”.

As it is motored by Brazilian families and consumers, not speculators, this growth is underpinned by real demand and shows no risk of developing into a bubble.

Strategic investments in areas of high housing demand

However, canny international investors can certainly take advantage of Brazil's property boom if they invest wisely.  Areas such as Bahia in Brazil's northeast are enjoying some of the country's fastest growth rates.  Having been historically poorer, home ownership is low,  and over 50% of the national housing shortage is focused in the North East.

The North East is certainly not just playing ‘catch-up'.  As the country's third-biggest city, Bahia's Salvador is rapidly becoming an industrial hub, with international players such as Ford Motors basing its largest global plant nearby.

Moreover, Bahia is the centre of Brazil's rapidly-growing agriculture and agribusiness industries. Already accounting for 30% of GDP, these areas are set to soar as European, American and domestic ethanol demand continues to rise and Brazil cements its position as the world's eco-fuels hub.  With Brazil facing a domestic ethanl shortfall of 150 million litres, Bahia's farmland offers a secure investment.Brazil's rapidly-growing global clout – as exemplified by the recent BRICS conference and 2010's 7.5% growth – will further cement Bahia's position as Brazil's industrial and agricultural powerhouse.

However, the Brazilian property market can be difficult to navigate: like all markets, scams are present and the naïve can get burnt.  Furthermore, few sellers speak English and local interests continue to play a strong role, particularly in historically closed-off areas such as Bahia.

With offices across Bahia as well as London, and international backing, regional experts Brazil Bahia Property (IBBI) understand the Bahian and international markets.  They work with local property developers and buyers to secure the best deals for international investors.

9.1 million people are looking to buy a home in Brazil, underpinning powerful international demand.  Add in growing industrial and agricultural clout and the Bahian and Brazilian property markets are ripe for investment.

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Jun
25
2011
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