“In order to talk about property value appreciation [in Brazil] you must first consider what effect the global economy has had on the country as a whole,” claims Sueli Pacheco, Owner/Director of Pacheco Imóveis in Sao Paulo.
Sueli Pacheco is one of several highly respected real estate professionals from Sao Paulo whom believe that the worldwide economic crisis has indeed exerted great downward pressure on the Brazilian real estate market but nonetheless claim that the Brazilian real estate sector is strong enough to continue to grow; “simply at a slower more sustainable rate,” believes Mrs. Pacheco who says that:
“We expect this second semester to perform quite well. Key indicators show real estate appreciation will continue its upward path; just not as accelerated as before…”
The Worldwide Economic Crisis Is Having Very Little Effect On Both Brazil’s Residential as well as Commercial Real Estate Markets
Other very reputable professionals such as Celso Kocinas, Owner/Director of Zylber Assessoria Imobiliária — whose focus is primarily on the commercial real estate sector — tell us that Brazil is in very good shape right now. Even more astonishing is the belief that it is expected to continue to be that way.
“Demand for commercial real estate (stores, shops, offices, etc.) is extremely high right now. Property value and appreciation has been significant and rental rates are high. The real estate sector in Perdizes for example [a neighborhood in Sao Paulo] is very strong regardless of the economic crisis or the falling US dollar.” claims Mr. Kocinas who further says that:
“Everyone is looking to rent commercial property. If I had a handful of shops to rent out right now I could rent them out very quickly.”
So Where is all This Upward Pressure Coming From?
The downward pressure on Brazil’s real estate sector is definitely a consequence of worldwide economic turmoil, but where is the upward pressure coming from? Why do real estate professionals such as Mrs. Pacheco and Mr. Kocinas think so highly of this market?
* The Brazilian government is making major investments in infrastructure.
* Brazil’s Central Bank is continuing to lower interest rates.
* Brazil is continuing to see strong growth throughout the construction sector.
* The Brazilian government has raised the lending cap for Brazilian workers which are buying homes through government backed programs.
* In the past couple of years we have seen more and more real estate trust funds (REITs) enter the Brazilian market.
* Tourism in Brazil is flourishing.
* The government has made great strides in reducing the red tape associated with foreign investment in Brazil’s real estate sector.
* Big name real estate internet portals have begun paying attention to Brazil thus giving the market even more foreign as well as domestic exposure.
Key economic indicators as well as the testimony of respected real estate professionals such as Celso Kocinas and Sueli Pacheco make Brazil’s real estate market seem highly shielded against the current global recession. The accelerated way in which the Brazilian real estate market over performed for the past couple of years may indeed slow down, but it is highly unlikely that it will come to a halt.
Brazil skyline photo kindly provided by flickr