brazil property market to see growth in affordable housing
News Posted On: 16 October 2009
The Brazilian property market will chiefly be characterised by high levels of affordability in the next few years, a report has predicted.
Real estate research firm RNCOS stated that the largest area of growth in the sector will be in the affordable housing market.
Its Brazil Housing Sector Analysis stated that this will be driven by factors such as the growth of Brazil's middle class, the ample availability of finance and strong government support. Such factors could encourage those looking for property bargains in the country.
However, what people must realise is that there is a gulf between what an affordable housing development will be designed to offer at conception, and what is offered by the type of developments traditionally looked at by overseas property investors and lifestyle buyers.
This is a logical next step for Brazil just as it was for the great emerging markets of Asia. During the past few years, Brazil's developers focussed on the international buyer; building luxury apartment and condo complexes in resort towns and/or by the sea.
All the while the economic growth that was so attractive to foreign buyers was creating growing wealth and a growing middle class within Brazil. The growing number of Brazilian's looking for affordable housing were crying out about the shortages of quality properties in their area, in and around their places of work and families.
Now that foreign buyers have shown how unreliable they are as a target market, developers are realising that the demand for affordable housing throughout all areas of Brazil has grown immensely, and turning their attention to this more reliable demand.
This does have a bearing to international investors, who are purely looking for an investment with no intention of using the property for themselves. This is because property in resort locations will always be developed to serve the luxury buyer, from overseas and the small but growing market from within Brazil. So, the affordable properties will not be in areas that holidaymakers will want to stay and so high yielding holiday lets are almost completely out of the question.
That said: buying into an affordable housing development in an emerging market like Brazil is still an excellent investment choice. The buy will be very cheap, the residential rental will be very reliable and the potential for long term capital growth very reliable and very strong.
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Article written by Liam Bailey
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