Foreign Investment in Brazilian Real Estate Higher Than Ever

While real estate investment in many countries flounders, foreign interest in Brazilian property has never been higher. 2011 saw record investment in Brazilian real estate and analysts expect more of the same this year.

According to the Brazilian investment agency ADIT Invest, financial transactions made by foreigners for real estate in Brazil rose by 50% in 2011. Top Rio de Janeiro property agents report that purchases by foreigners made up 30% of their business last year with the average property costing around R$2 million. Real estate professionals in Sao Paulo echo this and say that most foreigners are buying up property in Brazil for investment.

All the Right Criteria

Brazilian real estate is ticking more and more boxes for more and more foreign investors. At the top of the list sits a stable economy, particularly in today's turbulent economic times. "The watchword for foreign investment in Brazil appears to be economic stability," comments Obelisk International, one of the main foreign companies investing in property in north east Brazil.

"Because Brazil has been virtually unaffected by the recent uncertainty and is presenting strong growth figures for 2012, more investors are turning to Brazil," says Obelisk. Predicted 4% GDP growth and record unemployment levels lead Obelisk International along with other foreign companies to expect to see more interest in Brazilian investment this year.

Big domestic drivers also form part of the attraction of investment in real estate in Brazil. These drivers include massive demand for housing from the ever-growing middle classes, whose greater purchasing power means thousands aspire to getting a foot on the property ladder. This demand is another major reason behind the current popularity of investment in Brazilian property.

Foreign Real Estate Companies Expanding

The renewed interest from Equity International in property in Brazil comes as no surprise to market observers. Brazilian real estate funds achieved record highs during 2010 and last year also saw exceptional performance by some funds, although the average return of 11.63% was lower than 2010.

And in turn, foreign companies dedicated to real estate in Brazil are strengthening their presence. According to Virginia Duailibe, President of the Brazilian Real Estate Association, "many large real estate multi-nationals such as CBRichard Ellis, Jones Lang LaSalle and Colliers International are expanding operations in Brazil".

On the back of the big demand from the domestic market and foreign investors, analysts are convinced that 2012 will be another promising year for Brazilian real estate investment.

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