Brazil Property Investment a No Brainer as Housing Demand Skyrockets

Brazil’s social housing shortage is once again making the industry headlines. Experts in low income housing expect the incoming President Dilma Rousseff to continue the socialist housing policies initiated by her predecessor, most notably the Minha Casa Minha Vida (My House, My Life) project, which offers preferential mortgage rates, and tax breaks to assist low income families in buying a house.

It is expected that the Brazilian mortgage market will be worth 500 million Real by 2015. And it is already expanding rapidly, in March this year loans were $4.1 billion were approved, up an incredible 82% on the 2009 figure.

Some 2 million affordable homes will be needed to meet demand emanating from the government schemes alone. By 2023 the deficit is estimated to have reached 7 million homes.

Property investment, be it at home or abroad is all about supply and demand. Buy to let investors want to see demand for rental accommodation at or over the level of supply current and estimated future, and the same goes for sales.

Normally, when you invest in a market like Natal for instance, it will be a buy to let investment, but the current reality means that much better opportunities lie in buying and reselling, especially with developers like Grup Immobiliari Natal offering properties at 20% below market value.

The fantastic Dr Geraldo Furtado is one of the fastest selling developments in Brazil ever, and it is easy to see why. It sits right at the heart of Petropolis, one of the most desirable areas of Natal, and offers high quality 2 bedroom apartments at the 20% below market value price £53,000. The apartments come with a guaranteed rental yield of 6% for 4 years by which times the housing shortage will be great. So you can either sell for a 20% profit on completion or a much greater profit in 4 years time.

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