brazil property set for massive growth in foreign investment
News Posted On: 05 November 2009
UK 2009-11-05 Brazil property has among the most potential in the world for capital appreciation on property values, and rental growth in, not only Latin America but all the developing world. This is mainly because of economic growth, which was already strong but will be boosted massively by revenues from the exportation of oil found under the sea and rocks off the Brazilian coast.
This will bring huge growth to an economy that had already been forecast by the International Monetary Fund to grow into the world's fifth largest by 2050. There is a clear trend that a growing economy brings increasing property prices and rents, which makes a country more popular with overseas property investors.
The fact that Brazil is to host the 2014 World Cup, and Rio the 2016 Olympics can only add to Brazil’s property investment appeal.
Here are some of the facts that promise to bring huge growth to the economy:
- 1 million new jobs are being created leading to the drop in unemployment from 7.9% last year to 7.5% this year.
- Brazil's current account is in much better shape than most countries, which put it in a good position to ride out the economic storm. National borrowing is only 4% of GDP and is set to reach 12% by 2014, compared to a current 65% in the US. The primary interest rate is now down to 8.5% making borrowing and credit for Brazilians possible for the first time in Brazil’s history.
- Social Housing – Like so many emerging markets, demand for low cost affordable housing far outstrips supply in Brazil. The Government has promised that 1.4 million homes will be created each year but there is already a requirement of 7.9 million homes. 28 million homes will be needed within the next 20 years according to Reuters ‘Brazil Housing Sector Analysis’ report.
- Foreign exchange reserves in Brazil increased from $202.4 billion in 2008 to $250 billion this year. The projection is that foreign exchange will increase up to $300 billion by 2010.
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