Brazilian real estate is showing some promise for 2010. While the United States and Europe continue to face tight credit markets and declining real estate values, Brazil is emerging as a sound long-term investment opportunity.
The reason behind this is the overall stabilization of Brazil’s economy. After a long period of instability marked by soaring inflation Brazil took a step back and put into place more stringent fiscal policies to ensure that, moving forward, it would be able to grow and prosper regardless of outside influences. That this is working is evidenced by its low rate of inflation—less than 5 percent in 20091—and the fact that the recent credit crisis had little impact on Brazil. The country is in a good position for growth at a time when many more developed regions are still trying to recover.
Brazil’s increasing population, and its need for both residential and retail space, will act as a catalyst for significant growth. A Pricewaterhouse Coopers’ report recently noted that the growing Brazilian population, specifically the middle class, has increased the need for more housing. This coupled with the lack of retail shopping space will ultimately lead to an increase in development in these much needed areas.2
Another area where Brazil’s growing economy has created new demand is office space.3 Here, too, the growing need for expansion will create opportunities for developers and, in turn, investors.
Many indicators point to Brazil as a bright light among a more dreary global real estate outlook. Although it is still early in the year, BHA anticipates Brazil is a country that will attract investor interest.
1, 2 Pricewaterhouse Coopers, “Emerging Trends in Real Estate 2010.”
3 Business Monitor International, “Brazil Real Estate Report Q3 2009.”
