Mortgages Predicted Soon For Brazil Property Investors

Posted on September 13, 2008
Filed Under South America

As you may already know if you are reading this the property investment market in Brazil is a hot topic and has been predicted for very good capital growth and rental income potential. In fact some properties in the northeast have increased in value by one hundred percent in the past 3 years. This is due to the strong economic growth and increased exposure, investment and development of the touristic investment property industry.

Brazil also offers superb holiday homes and second homes for people looking for a sun, sea, & sand and to enjoy the superb carnival culture.

A good number of international property developers are now building a range of superb touristic residential resorts in the northeast of the country and especially near Natal the capital city of Rio Grande do Norte.

A lot of foreign property buyers are already buying but we predict that the only thing holding the market back is the lack or shall I say non-existent mortgages for foreigners. However because of the potential of the market we believe that mortgages will be available soon.

In our opinion the shrewd property investors with the cash available are buying now and are set to make good amounts of capital gains as soon as the mortgages are introduced and the property investment market becomes more accessible.

The mortgage market is to say the least well under-developed. A few mortgage products were introduced and around 50,000 mortgages were granted for Brazilians in 2005, however these had high interest rates. Housing is a big issue for the majority of the Brazilian population and the government and banks know they need to make mortgages available to help economic growth and the quality of living for Brazilian people.

As well as mortgages for Brazilians we predict that the banks will also start to introduce mortgage products for foreign investors as well because of the growth demand and quality Brazil investment property being built with the foreign buyer in mind.

At present (Sep 2008) the only option for foreign nationals looking to purchase Brazil properties is to arrange alternative finance like re-mortgaging there property in the UK for example.

We predict that as soon as mortgages become more accessible for foreign investors buying in Brazil the property market is sure to become more accessible and attractive and an increasing number of people will be purchasing meaning the value of properties will increase and the people who have already purchased should see good capital growth.