Brazil Mortgage Market Set for Record Year
In tandem with the booming market for property in Brazil goes a rapidly expanding market for mortgages. The Brazilian mortgage association expects 2010 to be a record year with R$50 billion in mortgages, an almost 50% increase on 2009.
ABECIP, the Brazilian Association for Mortgage Lenders, has recently published results for the mortgage market in Brazil for March and Q1 this year. The figures, all of which show impressive hikes, demonstrate that real estate in Brazil is in the process of fast expansion.
Although mortgages in Brazil are relatively recent, the Brazilians are increasingly keen on home loans. Proof of this can be found in mortgage figures for March, which was the best month in the history of the Brazilian mortgage system. During March, mortgages were approved to the value of R$4.1 billion, over a third higher than the value for February and a massive 82% more than March last year. The numbers of units financed also increased significantly with March notching up mortgages for a total of 28,912 homes, a rise of 17% on February and of nearly 35% on March 2009.
Quarterly statistics make even more impressive reading. The total value of mortgages during the first three months of this year came to R$9.98 billion, a year-on-year increase of 70%. What is more, Q1's mortgage value equates to 30% of the amount lent during the entire year in 2009.
The number of properties in Brazil mortgaged during Q1 has also experienced a rapid rise. The R$9.98 billion in mortgages was approved for 76,539 homes, an increase of 38% on the same quarter last year. Not only are more properties being mortgaged, the price of Brazil property is clearly rising. If the average value of a mortgage in Q1 2009 was R$112,400, in Q1 this year the average comes in at R$130,400. This increase of R$18,000 would seem to indicate that property prices in Brazil have gone up in the region of 16% over the last 12 months.
According to ABECIP, the mortgage figures confirm that Brazil has returned to normal economic activity. The statistics also lead ABECIP to believe that 2010 will be a record year for mortgage lending. The association expects a total of R$50 billion mortgage loans to be approved by the end of this year, a figure that would represent a 47% increase on 2009.
For Obelisk, the ABECIP figures are a useful guide to judging the state of the property market in Brazil. In the absence of official statistics for property sales and prices, figures like these help us gauge the market. With such huge increases in both mortgage lending and average mortgage values, we at Obelisk believe it is more than obvious that the Brazilian real estate market has massive potential for growth and investment returns.
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