Brazil Facts Property InvestmentAlso see Affordable Housing Brazil Affordable Housing Brazil Projects Brazil is one of the BRIC countries (Brazil, Russia, India, China). It is the only one to have a full democracy and low risks of war, terrorism, SARS and hurricanes. Morgan Stanley Capital International recently reported that Brazil has become the world’s biggest emerging market, displacing China. Brazil is self-sufficient in energy and raw materials, helping to insulate it from any downturn in Western and US economies. Many press reports state that Brazil is unfazed by the financial crisis in the US and Western Europe caused by the collapse of sub-prime mortgages and property prices. Inflation was 3% in 2007, well below the official target. This has allowed a steady reduction of interest rates whilst much of the world has seen increases . Brazil’s benchmark fixed lending rate had fallen from 21% in 2005 to 13.5% in 2008. The government of Brazil expects this to continue falling to 9.5% by 2010. Fitch Risk Management Inc confirmed the investment grade of Brazil as BBB. “Brazil is more protected because it has more than US$ 200 billion in International reserves and the economy is less dependent of exportation” In 2014 Brazil will host the Football World Cup, with 3 North Eastern cities, including Fortelaza. Brazil is also hotly tipped to win their bid to host the 2016 Olympic Games when the IOC reaches its decision next year. The programme for the development of tourism in the North East has invested in excess of $736 million in several hundred infrastructure, property and transport projects The Brazilian economy is expecting a considerable boost following the discovery of what is believed to be the world’s largest offshore oil field. The “ultra-deep” Tupi field off the coast of Rio de Janeiro is unlikely to fully come on line until 2013 but is expected to have a total value of US$25 billion to US$60 billion allowing Brazil to join the ranks of the World’s top 10 major oil exporters. Additionally, the Government is actively encouraging tourism growth which is viewed as a means of fast tracking economic growth. Investor confidence in Brazil is best exemplified by the massive growth of foreign direct investment (FDI) flowing into the country, which doubled in 2007 to US$37.4 billion,exceeding FDI flows to Japan and India (Brazil Central bank figures) Foreign investment in new construction and real estate projects in Brazil jumped 35% to US$2 billion last year, the fastest expansion in three years. Starting in mid-2005, more that 25 property companies have debuted on the Brazilian Stock Market, raising more than R$17 billion. According to the Sao Paulo Stock Exchange, foreign investors bought nearly three quarters of the shares on offer. The Housing deficit in Brazil is estimated at 7.9 Million properties and set to rise to 12.5 Million properties by 2023. According to the house building charity Habitat for Humanity, the greatest deficit in affordable housing is in the Northeast states of Brazil - Maranhao, Piaui, Ceara, Rio Grande do Norte, Pernambuco, Bahia, Alagoas and Sergipe. As an example of regional property shortages, the state of Ceara has a deficit of 424,321 properties whilst Fortaleza, the capital city of the state, has a deficit of 156,335 properties. The recent availability of 360 month mortgages (previously 60 months), record low interest rates and rising wages have led to record mortgage borrowing, and government guarantees for low-income property buyers are making low cost properties attractive Brazil's Real (R$) has risen to its highest level for over eight years as demand for commodities plus domestic local stocks and bonds have fuelled currency purchases. Brazil has also built up foreign reserves of over US$100 billion, further insulating its economy from recent global financial tremors. Improvements in property and rural electricity programs have been recent accomplishments in Brazil. The World Bank has played a catalytic role through a Housing Development Policy Loan of US$502.5 million, approved in June 2005. An additional Sustainability Loan of US$505 million has also been granted to support Brazil‟s goal of balancing economic growth with social development, plus the maintenance and improvement of environmental quality. The World Bank also approved a US$501.25 million Road Transport Project to improve Brazil‟s federal road infrastructure. Brazil Investment - facts and figures
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