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Brazil Property a Hot Investment
February 16, 2011Article by Ray Withers
Brazil property is known as one of the hottest investments in the world right now due to several key factors:
The Brazilian economy is one of the fastest growing in the world. Thanks to its massive population, massive industries like agriculture, the massively growing services sector, and the discovery of the largest oil field in Latin America, not to mention the World Cup in 2014 and Olympics in 2016, its current GDP growth rate of 6-8% is expected to continue for the foreseeable future.
The Brazilian population is one of the fastest growing in the world. It almost doubled between 1950 and 1970, growing from 51 million to 93 million. By 1991 the population was 147 million or 2.7% of the world’s total population. It grew a further 10 million in the five years to 1996. In 2010 the Brazilian population was estimated at 191 million.
Growing Middle Class:
According to figures taken in 2010, the Brazilian middle class is now 91 million people, which is approximately 49% of the population. This is up from 64.1 million, 37.5% of the population when the former President Lula da Silva came to power in 2003, thanks to his welfare programs like Bolsa Familiar.
An article in the BBC from 2007 tells of the improving conditions even in the poorest parts of Brazil, in the so-called “Favelas” (slums), where what it called the lower middle class were benefiting from the lower inflation allowing them to enrich their lives with things like DVDs, TVs and even cars and homes.
Growing Demand for Housing
Because of the growing population, growing middle class and President Lula’s determination to improve the inequality of the country, and especially to buy a house with help from the Minha Casa Minha Vida (my house my life) programme, it is estimated that demand for housing outstrips supply by around 30 million in Brazil.
Growing Mortgage Market:
The government is working tirelessly to improve the availability of mortgages in Brazil. In March 2010 $4.1 billion in mortgages were agreed in Brazil, an incredible 82% growth compared to March 2009.
Other Factors Supporting Brazil Property Investment:
Over the coming 5 years the government is to invest massively on improving the infrastructure. This investment will generate more jobs, more middle class people and more demand for Brazil property.
The Brazilian government is not going to want the World Cup and Olympics the chance for its Favela problem to gain international recognition, so we can expect to see the determination to reduce poverty and to close the rich-gap divide continue under the new President — if not intensify.
Finally, for the first time we now have availability of affordable housing developments in Brazil on the western markets. Developments like Dr Geraldo Furtado offering 2 bedroom apartments in central Natal for under £80k are golden opportunities to capitalise on this growth.