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23-Feb-2010

Confidence in real estate as an investment vehicle is high this year, particularly from institutional investors.

Healthy Gain for Brazil Property Investment

26 January 2010

Brazil is already tipped to become one of the top performing overseas property destinations in 2010. And the recent release of figures reporting price rises of 13% on Brazil real estate confirms the Latin American giant's excellent investment potential.

Brazil releases no official statistics on property prices, although experts on investments in Brazil are unanimous that house prices have been experiencing a steady upward trend.

The latest figures released by Cyrela Brazil Realty - one of the largest groups of real estate agents in Brazil - point to a year-on-year price rise of 13% between Q3 2008 and Q3 2009. Prices per square metre on units sold by Cyrela rose from R$3,052 to R$3,452 in 12 months. There was also a spectacular hike in the number of units sold. In Q3 2008, 4,974 units were sold with this figure increasing to 6,378 in Q4 2009, constituting a rise of around 28%.

Cyrela is one of the biggest real estate agent groups in Brazil and also one of the oldest. With a presence in 17 states and 55 cities, Cyrela has access to a large proportion of the property market in Brazil. The company has numerous partnerships throughout Brazil including Abreu Brasil Brokers in north east Brazil. Abreu is the largest estate agent in this part of Brazil and the management company for Laguna Beach, the luxury beachfront complex developed by Obelisk International.

Foreign investment in Brazil property has seen a steady upward trend, particularly since September last year when it became clear that Brazil had left the global recession far behind. Homesoverseas.co.uk claims foreigners are literally "flocking" to Brazil's coastline to snap up property. Investment from Brazilians is also booming as increased purchasing power and record-low interest rates make homeownership more accessible.

The claims of a booming market are backed up by the number of units sold by Cyrela as well as the company's results - year-on-year sales in Q3 2009 represented a 40% increase.

The government's ambitious low-income housing programme aims to build 1 million units by the end of this year. The programme has been a huge success and is pushing construction rates to record highs. Investment in property in Brazil is currently taking place at all entry levels and many experts agree that investment has never been stronger.

For Obelisk, the potential for return behind Brazil real estate is obvious. As the rhythm of construction in Brazil gains pace, Obelisk believes that double-figure price hikes are likely to make the headlines for several years to come.

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