As any savvy investor knows, the ideal time to purchase an asset is when prices are low. With currency exchange rates at their most favourable for foreigners in a long time, Brazilian property stands at its most attractive. So argue experts from the Brazilian property sector and – judging by record lending figures for April – so do Brazilian buyers.
Economic restructuring and Brazilian property prices now rising at below the inflation rate leads some high-profile experts to believe that now is the most favourable time to invest.
Luis Barros, Vice President of the Brazilian Association of Financial Executives, is one of them. “In normal market conditions, property prices go up faster than the rate of inflation,” he explained in a press interview, “but in today’s adjustment scenario, the opposite is true.” Barros points out that this situation will continue until the new economic policies take effect and by extension, now is the time to buy Brazilian property.
The latest statistics from the FIPEZAP national index for property prices in Brazil show continued growth albeit at a slightly slower pace in the first five months of 2015. Despite this, price growth in the year to May 2015 is still respectable at 4.9 per cent growth. In some locations, growth remains higher such as Fortaleza in Northeast Brazil (6 per cent) and Florianopolis (5.8 per cent).
Foreign buyers have the additional advantage of being able to benefit from the weak Brazilian currency. For property hunters planning to buy in sterling, Brazil has become 27 per cent cheaper than this time last year, prompting some experts to refer to it as “a budget destination”. For those buying property in US dollars, Brazil is even more of a bargain.
Mortgage lending up
If the latest mortgage figures are anything to go by, Brazilians are taking what Barros says on board and buying now. Loans for building and buying property in Brazil reached US$9.25 billion in April, 9 per cent higher than March. This figure represents the best ever for the month of April since records began in 1995.
Mortgages were approved for some 44,600 units in Brazil, a year-on-year rise of 2 per cent and an annual increase of a massive 20.8 per cent. So far this year, mortgages have been given for 154,000 properties in Brazil.
Sources: O Globo, FIPEZAP