Economic Climate Ripe for Brazil Property Investment

Significant and lasting policy changes affecting the economy and currency in Brazil have been effected in recent years and now a situation has been established where the economic climate is ripe for Brazil property investment interest to rise. 

We predict that 2007 and 2008 will be very exciting years as far as the emergence of a new wave of interest in Brazilian real estate assets is concerned.

The successful re-election of Luiz Inacio ‘Lula’ da Silva in Brazil this year for the 2007 – 2010 presidential term was tantamount to the continuing success of the government’s reforms; and now that Lula is in power the stability of the Brazilian currency and the strength of economic growth will continue to underpin a climate that is witnessing strong levels of foreign direct investment into everything from straight property in Brazil to Brazilian private equity funds.

After Brazil suffered a mass exodus of investor interest in 1999 and the effects of weak US dollar returns as a knock on from the tech bubble bursting in 2000, the Brazilian government was determined to protect the economy and the nation’s people from such a devastating series of economic events again.  To that end Brazil enacted significant policy reforms that have seen for example, the establishment of a solid local financial climate that allows local people, companies and even the government to borrow in the local currency.

The change to the lending climate in Brazil is significant – it means that massive exposure to external currencies and foreign interest rate fluctuations has been removed thus fundamentally stabilising the local economy. 

In tandem with these reforms and significant changes the central bank in Brazil has been targeting inflation and reining it in tightly.  This may have resulted in lesser growth in the short term but it has definitely resulted in more sustainable growth patterns which over the medium term will prove attractive and restore confidence in the Brazilian economy resulting in a resurgence of property investor interest.

Not only is inflation under strict control, but the nation’s economic deficit has been reduced and now that Brazil is not suffering from massive external debt, high and unstable inflation or exposure to or dependence upon foreign currencies, the nation’s economic outlook has dramatically changed for the better.  So much so that together with Mexico, Brazil is propping up the Latin American region and the region has significantly beaten the Asian tiger economies over the past three years…

The ongoing success of nations such as Brazil and Mexico are likely assured for a number of reasons other than the ones mentioned – for example a country like Brazil is in a strong position because of the likes of Petrobras and its oil reserves which makes Brazil a key country to invest into if you’re a nation with high dependence on petrochemicals!  Brazil is also a nation that has seen limited growth in its property market whilst the economy has been being brought under tighter control for sustainable growth…this means that currently prices for desirable properties across the country are artificially low and this gives an investor a chance to buy in now and profit well in the short term or hold for long term appreciation and/or income generation.

While we’re truly hot on Brazil right now for the above highlighted reasons, we would only advocate Brazilian property assets be held as part of a diverse portfolio of assets.

Special Reports: Property News for Brazil

Brazil Country Guide for Property Buyers
Guide to Brazil from a real estate investor's perspective focusing on the property investment opportunities and the beauty of Brazil

Brazil Real Estate Buying Process Guide
The real estate buying process in Brazil is straightforward and well regulated which gives buyers confidence in the property market

Brazil Real Estate Investment Guide
Brazil real estate offers fantastic medium term investment potential now that the government are committed to long term economic development.