On the back of solid demand from society and increased mortgage lending, there’s plenty of room for growth in the Brazilian property sector. With the total home loans to rise by 10 per cent next year, 2015 looks set to see further consolidation in the market.
This forecast came from the Vice-President of the Housing Department in the Caixa bank José Duarte, who predicted strong growth for property in Brazil in 2015. Speaking at the ninth edition of the ADEMI Wimovéis property exhibition in Brasilia, he based his forecast on Caixa mortgages data.
According to Duarte, the total mortgage credit in Brazil is expected to reach R$200 billion by the end of this year. This amount represents a 10 per cent increase on the total in 2013 and is the equivalent of 9 per cent of Brazil’s total GDP. This figure is nine times higher than the one registered in 2008, but despite the rise, remains far behind the percentages seen in the UK and US (around 81 and 69 per cent respectively).
The Caixa, Brazil’s largest public bank and one of the biggest providers of mortgages in Brazil, believes mortgage credit levels will increase by a similar level in 2015. The Caixa reports big interest in mortgages from Brazilians with around 7 million mortgage calculations taking place on their site every month.
These strong annual rises in mortgage lending are, according to the Caixa, indicative of the strong domestic demand for property in Brazil. “There’s still plenty of room for growth in the market,” Duarte told attendees at the exhibition.
The Caixa mortgage data has also revealed a change in the profile of the Brazilian property buyer. Around 57 per cent of homebuyers are under 35, a marked shift to a younger market – just a few years ago, most buyers were under 45. This younger buyer profile reflects the changes in Brazilian society as more and more Brazilians find employment and increase their spending power.
Around 15 per cent of mortgage calculations on the Caixa website are for properties in Brazil priced at under R$80,000, mirroring the younger profile of a first-time buyer. According to Duarte, 5 per cent of calculations are for properties costing under R$400,000, proving there’s also strong demand for this higher end of the market. As Duarte concludes, the Brazilian property market “is very promising”.
Source: ABECIP – Associacao Brasileira das Entidades de Crédito Imobiliário e Poupança, European Mortgage Federation