9 November 2009
Property investors looking for a more hands-off approach than the traditional “buy/rent/sell” options - and who aren’t averse to a bit of out-of-the-box thinking – should consider buying property in Brazil, according to Philip Wye of Ignition Investments Limited.
Wye points out that there are a number of investment vehicles within the Brazilian real estate sector which are taking advantage of some pretty hefty government investments into the country’s affordable housing sector.
Brazil’s economy has been booming in recent years, with the country’s huge natural and human resources helping to propel it to the global economic centre-stage as part of the BRIC quartet of high-powered emerging markets.
“Brazil is the fifth-largest country in the world with over 190 million inhabitants and its economy is now in the global top 10. While virtually all other economies are shrinking, Brazil’s is stable and growing,” says Wye.
As a result, Brazil’s middle-class is expanding at a rate of knots, with all the increased affluence and aspiration that entails.
However, the supply of residential properties in Brazil is not keeping pace with the new demand among many hitherto-impoverished families for higher-quality urban homes: a recent report by Ernst & Young puts the deficit at some 8 million properties - and rising.
To counter this growing problem, Brazil’s government is providing billions of dollars in affordable credit to families - as well as offering incentives to those developers building affordable homes in Brazil with state loans and tax breaks.
Overseas investors are beginning to enjoy access to the fruits of this affordable-housing revolution, with some funds now open suggesting returns of at or near 10% per annum. While it was the luxury end of the Brazil property market that was making waves during the UK’s foreign-buying boom years, it might well be the other end of the market that offers prospects of real treasure in today’s altogether-less-clement market climate.
See Also: Brazil (0), Marc Da-Silva (0), Ignition Investments Limited (0), Philip Wye (0)
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