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The Challenges in Brazil Real Estate
In the past ten years the property market in Brazil considerable challenges. The meeting with them and the new investment is crucial for success in one of the world’s hottest real estate markets.
Brazil is a destination for property investment is relatively young, but also in its short history, the market has changed radically. Ten years ago, real estate investment is concentrated in the upper class (also known as Class A) with centering the construction of large houses in desirable locations in major cities in Brazil. This market is lively while it lasted, although the lack of credit and the choice of the property still held back growth.
In 2004, when the economy started its way to the consolidation and steady growth, a new market for property investment in Brazil has emerged – the middle class (also known as Class C and Class A / B). Securing this new market was the introduction of home loans, although the mortgage market remained small and underdeveloped to 2009.
Brazil has one of the world’s fastest growing middle class. According to the Getulio Vargas Foundation, the middle class rose by 4% annually since 2004. This social process that has changed the face of the housing market in Brazil, which today mainly for the middle class.
The middle classes have different tastes and property on the real estate market has adjusted to fit. The houses are small (two or three bedrooms instead of four), with the quality of recreation areas – for example, swimming pools and tennis courts – and are in metropolitan areas in Brazil.
Catering for the lower end of the middle class was largely supported by the Brazilian government. Minha Casa Minha Vida, social housing in 2009 launched, offers apartments for Brazilians earning between zero and ten times the minimum wage. The income that had already proven, and economically attractive for developers, is now a major investment opportunity in Brazil. So far this year, about 90% of the units in Sao Paulo started Minha Casa Minha part of the program Vida.
Adaptation to new requirements of the real estate market has a steep learning curve for developers in Brazil, though, most of them changed their business models and with great financial success. Lessons learned include cost trends, strategic alliances or partnerships within the company and the importance of finding larger image of Brazil and development away from large cities. Developers are now just as the middle class in Brazil are prime targets for investment. As such, the quality and standards of construction and surfaces are important to meet consumer’s needs.
But one of the biggest challenges for the property market in Brazil is the demand. With nearly 700,000 units expected to be completed this year, Minha Vida Minha Casa, in view of her million households by the end of 2011 (3 million end 2014). But in terms of demand for real estate in Brazil, it is just a drop in the bucket.
And to grow the middle class and aspirations, the meeting request impossible for at least the next 15 years, resulting in a variety of investment opportunities in the property for the middle class in Brazil.
Chances are the back of the class C are available through the top of the class B. Whether it try for the Brazilians, a dream for life or for Brazilians, including higher salaries to meet their own that they aspire to a better lifestyle, including a better home, Brazil has the tick investments.