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Brazil housing market booming 'til 2017

Thursday, December 22, 2011

Investors worried about an overheated Chinese housing market need only turn to Brazil. This real estate market has legs. And the recent five year real estate boom there has a good five more years before home values stop appreciating.

“The best way to participate in the real estate boom as an investor at this point to invest in real estate funds in Brazil,” said Marcus Vinicius de Oliveira, executive director of real estate valuation firm Consul Patrimonial.

That kind of comment is smooth bossa jazz to the ears of fund managers like Joel Wells, who co-manages the $356 million Alpine Emerging Markets Real Estate Fund (AEMEX). The fund holds a number of Brazilian home builders and commercial developers. But despite the generally positive long term outlook for Brazil’s housing market, a slower economy and a sovereign debt crisis in Europe has undercut that more positive story line about emerging market housing booms, including those in sunny Brazil. Well’s fund is down 28% year to date.

Housing prices have cooled in recent months, but are rising year over year. Interest rates are falling to single digits once again as inflation begins to ease on account of the global economic slowdown taking its toll on Brazil. That hasn’t stopped the fact that Brazil’s middle class is now the majority of the population for the first time ever and they have money to burn.

Source: Forbes.com

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