Fantastic Fiscal Fundamentals Support Brazil’s Property Sector

There’s an old saying that goes something like this ‘when America sneezes, Europe catches cold and the rest of the world gets pneumonia.’ There are about a hundred derivatives of this phrase but you get the general idea – i.e., if the number one economy in the world is suffering then the rest of the world suffers more greatly.  And in the past it was incredibly true that if there was a downturn in the US economy, then Brazil was one nation that bore a significant brunt.

However, recent economic indicators and financial opinion from leading global think tanks suggest that the Brazilian economy is actually holding its own in spite of a US downturn thanks to economic diversification, and that 2008 will see the nation continue to witness substantial levels of foreign direct investment (FDI).  Therefore, in true tabloid headline style, we at Amberlamb see that there are fantastic fiscal fundamentals supporting Brazil’s property sector.

Since President Luiz Inacio Lula da Silva took office in Brazil back in 2003 and declared that his main policy would be one of fiscal responsibility, he and his administration have worked tirelessly and with a single-minded purpose towards making the economy in Brazil robust. 

Previously the economy in Brazil was a joke with the currency as volatile as the Turkish Lira once was and the entire nation over exposed to fluctuations in America’s fortunes.  It was against this backdrop of financial insecurity that Brazil was attempting to win foreign direct investment into all sectors including the Brazilian property market - and largely failing to get anything other than speculative, short term, damaging investment that took advantage of the nation’s unstable state.

Following the election of President Lula da Silva the situation in Brazil has dramatically changed, at least in direct respect of the economy.  For example, through economic diversification, productivity improvements, higher international commodity prices and overall economic reform, Brazil is now believed to be on the cusp of achieving investment-grade rating by the likes of Moody’s and Standard & Poor’s.

This total transformation has taken a great deal of time and effort – but it has been tried, tested and not shown to be precarious.  Which is why the local currency is riding higher than it has since May 1999 against the US dollar according to a Bloomberg report, why investors are buying in to the Brazilian stock market and why so much direct investment is flowing specifically into the nation’s property market.

Property in Brazil has become a must have commodity for anyone and everyone from your next door neighbour who wants a place in the sun to the landlord seeking location diversification for greater yield stability.  There are profits to be derived from the Brazilian real estate marketplace whether you prefer to target capital appreciation potential in Natal or yields from commercial property in Rio.  And now you can feel more confident about committing to Brazil for the longer term because its economy is showing signs of remaining robust - so this opens up even more areas of profitability potential.  It’s no wonder we’re so hot on property in Brazil is it really!

Special Reports: Property News for Brazil

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Brazil Real Estate Investment Guide
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