Brazilian Real Estate in Excellent Health
With robust demand across the board, Brazilian property is enjoying excellent health. With promising prospects in both residential and commercial sectors, real estate in Brazil represents one of the best investment opportunities currently available.
In their quarterly look at global real estate, Jones Lang LaSalle (JLL) finds diverging real estate markets and strong resilience in the major emerging markets. The Global Market Perspective for Q4 2011 is generally bullish on property and reports that investors are “attracted by property’s safe haven status”.
Property in Brazil Ranks High
The Perspective includes a Global Real Estate Health Monitor where commercial property markets in 11 leading nations are put under the microscope. Brazil scores highly on all accounts and in many cases, ranks among the best performers in the table.
For example, national investment volumes in Brazilian commercial property saw a year-on-year increase of 207% in Q3 2011, the highest in the report. Its nearest competitor was Russia with a 183% increase, followed by the US where real estate volumes grew by 117%.
Quarterly capital value changes for prime offices in Brazil rose by 14.4%, the sixth highest in the table where Russia led with an increase of 49%. The positions were reversed for prime office yields with those in Brazil highest at 10%. A similar pattern is seen in Brazilian real estate occupier markets – year-on-year rental changes rose by 20%, the fourth highest after Russia, China and Hong Kong.
Most dynamic market
JLL reports that emerging markets are experiencing “robust absorption levels and rental growth”. Within this global scenario, emerging market cities are particularly active and Sao Paulo is reportedly one of “the world’s most dynamic real estate markets”.
Although Sao Paulo is the main hub for Brazilian real estate transactions, the same trends can be seen across the country. Latest figures from the Brazilian Mortgage Association (ABECIP) show that loans for Brazilian property have increased massively in 2011.
According to ABECIP, year-on-year mortgage lending in September reached R$58.9 billion, a 49.3% increase. The number of residential units financed also saw a big hike – up 20% on September 2010. These statistics confirm the high levels of transactions in the property market in Brazil.
Obelisk International market research has tracked this dynamism in the Brazilian real estate market. “It’s probably a unique market,” says Obelisk International, “because there are great investment opportunities in all real estate sectors and throughout the country.”
With ever-increasing sales in residential, “one of the world’s tightest markets in offices” and a 156% year-on-year increase in hotel transaction volumes, Brazil certainly has plenty to offer a real estate portfolio. And with the vast majority of these investment opportunities yielding high returns, Brazilian real estate has never been healthier.
Delicious
Follow us on Twitter, Facebook and Linkedin.
Go Back to Investment News
