Brazil Property Investors Far From Housing Market Bubble

Brazilian real estate is this a housing bubble?

The reason why overseas investors are excited by the potential taht Brazil offers was demonstrated clearly by the outgoing president Lula da Silva. He predicts that Brazil would become the world’s fifth economy by 2016, however at the same time there is talk of a housing market bubble.

economy is now in such a strong position that it lends money to the International Monetary Fund. Brazil is a creditor nation lending US$ 14 billion to the IMPF.

Brazil will receive further boost as it anticipates a record crop of 148 million tons of grains and oil seeds which has made the country one of the world’s top exporters.

Brazil Expanding Economy

Brazil’s economy may expand 7.6 percent this year, the fastest pace in more than two decades, pushing the inflation rate to 5.85 percent, according to a Dec. 10 central bank survey of about 100 economists. Growth will slow to 4.5 percent next year, with consumer prices rising 5.2 percent, the survey showed.

With Brazil growing at its fastest pace in almost three decades property prices in Brazil are climbing and in some creating fears of a housing market bubble.

Housing Market Bubble or Sustainable Growth

In a country where the mortgage market is still in its infancy and millions of people are becoming bona fide consumers for the first time, speaking at the Reuters Brazil Investment Summit in Rio de Janeiro, PDG Realty Chief Executive Zeca Grabowsky stressed that demand, not speculation, was driving the boom.

“It’s far from a bubble,” he said. “This is real demand, its people buying their house for the first time, to live in it.”

Brazil’s consumer prices, as measured by the benchmark IPCA index, rose 5.63 percent in November from a year earlier, the highest level since February 2009. The central bank targets annual inflation of 4.5 percent, plus or minus 2 percentage points.

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