Brazil Experts Discuss the 2011 Residential Property MarketShortly before the Christmas break, a group of Brazil’s leading real estate specialists – including construction company CEOs, engineer / architecture professionals and university professors* – convened to discuss the future of the market as the country enters 2011.
The general consensus was that the residential real estate market will grow in 2011 prompted by the pent up demand formed during the brief downturn of between 2007 and 2009. This pattern will be fuelled by increased mortgage credit availability, longer terms and lower interest rates as well as a healthy employment market, rising middle class purchasing power and increased international investment interest.
For high income earners, demand levels are expected to remain the same as with 2010. For middle-income earners, it was stated that the demand should remain broadly buoyant but some noted of a slight over supply in some regions. For the low income housing sector, demand is expected to be higher than in 2010 and 2009 – yet, whilst viewed as positive news for the industry as a whole, several concerns remain.
As it was announced by Caixa Econômica Federal that the allocation of the ‘Minha Casa, Minha Vida’ (‘My House, My Life’) project had not reached its target rate of 1 million housing units (875,000 units were allocated finance by the close of 2010) – debate was raised about the progress of many of projects currently underway. Some of the bottlenecks include the lack of defined price ceilings that work in line with affordability levels; off-putting bureaucracy levels; the issue of rising construction costs placing difficulties on making projects viable in line with the market and the lack of suitable land in urbanised areas close to employment, schools, health care and other essential amenities.
We discuss the above issues and more in detail in the 2011 Brazil Real Estate and Land Investor report.
Please click here to head direct to the introductory blog post and free download.
*Some of the prominent figures present included: Alessandro Olzon Vedrossi (Investor Relations, Brookfield Real Estate Incorporations); Alex Kenya Abiko (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo); Carlos Terepins (Even Constrution and Incorporations); Claudio Tavares de Alencar (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo); Daniel Citron (President of Tishman Speyer Brazil); Eliane Monetti (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo); Eric Cozza (Editorial Director of the Téchne Magazine); Fernando Bontorim Amato (Development Director at Y Takaoka); Marcelo Vespoli Takaoka (CEO of Y Takaoka); João da Rocha Lima Jr. (Associate Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo and Director of ‘Urban Systems Brasil’); José Romeu Ferraz Neto (Director of RFM Constructions); Mario Rocha Neto (Operations Executive Officer at Gafisa); Roberto Aflalo Filho (CEO of Casa.com.br); Roberto Sampaio (Head of Engineering at HSBC Brazil) and Sergio Alfredo Rosa da Silva (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo).