The big cities of Brazil have seen housing prices soar thanks to growing salaries and easily obtainable mortgages. What we want to know is how this will benefit residential housing projects and condominium developments in the North east?
Rio de Janeiro – Brazils prime property hotspot – is undergoing a fantastic property boom seeing prices climb 250% in the last 6 years (according to the FIPE-ZAP Index). Aided by increased mortgage lending of 32% last year totalling a whopping £29bn (according to the countries mortgage lender representatives), Penthouses overlooking the famous Ipanema beach are now selling for around £1.8m and renting for £8,900 pcm – bought for only £1.2m 2 years ago.
The increase of housing prices has been pushed by the 2014 World Cup and even more so now that Rio has claimed it’s spot as host city for the 2016 Olympic games with people taking advantage of the opportunity to get a good return on their investment. Saying that most economists agree that Brazilians are actually still buying homes to live in and not to make a quick profit, a fact backed by the percentage of mortgage lending as a proportion of the economy which is less than 10%.
Brazilians are spending more money than they have been in the past, partly fuelled by consumer credit, and that includes property, so how is this affecting property prices in the North east?
With property price surges in larger cities like Rio and Sao Paulo making it increasingly more difficult to obtain affordable housing, second-home buyers from the southern and central regions have now turned their attention to the Northeast for its stunning coastline and appealing property prices.
From 2000 – 2010, northeast real GDP growth rose by an annual average of 4.2%, higher than the countries annual average of 3.6% making the region the countries star performer over the past decade. Not only has the northeast become a popular holiday destination for the wealthy, cities such as Joao Pessoa, Natal, Recife and Fortaleza are now benefitting from a residential property boom due to a demand for rental accommodations in these areas.
The Minha Casa, Minha Vida government housing program has also allocated R$36 billion to the targeted construction of 2 million houses by the end of 2014, and cities like Joao Pessoa in the Northeast are taking full advantage of this.
Projects like the Tambaba Country Club Resort and Pueblo Do Mar developments offers local Brazilians and International buyers the opportunity to invest in Brazil’s property market and take full advantage of the current 8 million housing deficit.