Mortgage Market Expanding in Brazil

The Brazil mortgage market is increasing month on month with loans for Brazilian buyers forecast to reach R$84 billion.
By: Stephen Naish, Brazil Property Investment
 
May 17, 2011 - PRLog -- The Brazil mortgage market is increasing month on month with loans for Brazilian buyers forecast to reach R$84 billion in 2011 says The Association of Brazilian Mortgages.  This figure does not include loans provided by Caixa Economica as part of the Minha Casa, Minha Vida Government backed scheme.

In 2005 Caixa granted R$5.1bn in mortgage loans, increasing to R$17.4bn in mortgages in 2009.  Caixa Economica is projected to lend R$24 billion in 2011 a 470% increase in lending since 2005.  The Association of Brazilian Mortgages states that the total amount loaned this year for purchases of homes in Brazil is expected to run to R$108 billion, almost 30% more than in 2010.

With  a population approaching 200 million a recent study by Banking Group Cetelem BGM states that the official C-Class population (middle class) of Brazil now stands at 101 Million people, an increase of almost 65% in only 5 years.  This group accounts for 53% of the population, almost the same figure as the combined middle class of the UK, France and Italy.

As well as the Growth in the middle class population, the A/B Class segment (upper classes) has also grown by the same margin of 65% rising from 26 million people to over 42 million people and the D/E classes in Brazil has reduced by almost half from 92 million people to 47 million.

When you consider this growth, it is clear to see that with so many new entrants into the A-C class category there is going to naturally be a massive growth in demand within consumer products, real estate and property targeted at these markets. The Cetelem BGM report also points to a 45% average growth in disposable income in 2010 alone and is expected to further fuel access to credit, mortgages, etc.

Stephen Naish, Development Director at Brazil Property Administration states that the fundamental drivers behind the current Brazilian property surge - increasing wages and a massively increasing population, coupled with chronic shortage of housing point to a long and sustained period of growth in the Brazilian property market.

He continues “There has obviously been a major shift in the property market here in Brazil due to the launch of Minha Casa, Minha Vida, but what we have noticed recently is that the international investors have now recognised the potential returns in this sector and are wanting to invest in the Brazilian first home market rather than the typical holiday resort style development which was previously attracting investment”.

Brazil Property Administration is a trusted and respected property consultancy based in Joao Pessoa, North East Brazil.   The company has launched a new property investment project for investors wishing to access the Brazilian first home development market at www.brazilinvestmentproperty.net.

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Brazil Property Administration is a leading supplier of consultancy services to development companies, investors and individual land and property owners in North East Brazil. The company is based in Joao Pessoa, Paraiba.
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Source:Stephen Naish, Brazil Property Investment
Email:***@brazilpropertyadministration.com Email Verified
Zip:58037-50
Tags:Brazil, Property, Administration, Development, Investment, Minha Casa, Mortgages
Industry:Construction, Real Estate, Loans
Location:Brazil
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