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Brazilian Property Market receives a boost

Brazilian Property Market receives a boost

Recent government measures have given the Brazilian property market a boost, particularly for demand. In some parts of the country, for example, Fortaleza, the market is already moving upwards with a rise in property prices.

 

The government social housing programme, Minha Casa Minha Vida (MCMV), has recently undergone some important changes. These adjustments are expected to have an important knock-on effect on the Brazilian property market as a whole and Brazilian construction companies have welcomed the new regulations.

 

New rules for social housing

One of the main characteristics of the Brazilian property market is the massive demand for housing. The MCMV programme was implemented to address this imbalance and since its introduction in 2009, it has provided homes for millions of Brazilians. However, demand still outruns supply.

 

The biggest changes come in the target market. The latest measures are specifically for families with income in excess of R$2,350 a month. This means that the MCMV programme will reach a larger sector of the Brazilian property market. For income between R$2,350 and R$2,600 a month, the programme offers properties financed with loans of 5 per cent annual interest payable over 30 years.

 

For Brazilians with higher incomes, the government has introduced access to property ownership under the MCMV scheme. While families with income between R$7,000 and R$9,000 receive no government subsidy for the purchase of property they do benefit from low interest rates.

 

Benefits for the Brazilian property market

According to Hiperdados, a company specialised in market data, the new measures will have several key benefits for the Brazilian property market generally. These include:

 

Larger market – for the first time, Brazilians with higher income have access to the lower interest rates offered by the programme. This will increase demand for property in Brazil. Hiperdados forecasts that this demand will extend to the rental market as well.

 

More construction – the boost to demand will in turn lead to more property launches and sales in the market. This will benefit all construction companies and heat up market conditions within the Brazilian property market.

 

Latest figures for the Brazilian property market

Hiperdados produces monthly data for the Brazilian property market, particularly price indices for the 50 largest cities in the country. The latest figures (February) show marked differences throughout Brazil with property prices in some cities experiencing consistent increases while others are failing to keep up with inflation.

 

Fortaleza property is currently one of the best performers on the market. In the 12 months to February, the city saw an increase of 7.34 per cent in property prices. This is the highest rise in the 14 biggest cities in Brazil and the third highest within the context of the 50 biggest. When it comes to comparing house price rises to inflation, properties in Fortaleza also rank well – the capital of Ceará in Northeast Brazil is one of only three cities with positive figures.

 

“Strong demand is a fundamental factor behind the Brazilian property market,” says Dies Poppeliers, Managing Director of BRIC Group. “These latest measures will undoubtedly bolster demand for property and ultimately boost the Brazilian property market still further.”

 

Get your foot on the Brazilian property market ladder now.

 

An investment company specialising in global real estate opportunities, BRIC Group is currently developing The Coral resort, in Northeast Brazil, a luxury beachfront resort. BRIC Group also offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.

 

(Source: Hiperdados)

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