Investors into the Brazilian real estate market will be heartened by the raft of positive news emerging from Brazil with regard to the economy, GDP growth and the boom in Latin Americas largest economy.
The Brazilian Government has released economic data showing a 1.9 per cent increase in real GDP in the second quarter. This has led to Goldman Sachs and BNP Paribas revising their original growth forecasts upwards.
Analysts were predicting growth of 3.5% for the year in July 2009, but have now revised this to 4 %, according to a weekly central bank survey of about 100 economists. They also forecast the economy to only shrink 0.16% this year, down from 0.73%. Brazil’s economy has rebounded from the global financial crisis and Brazil has defied analysts’ previous forecasts. The figures bode well for 2010 stated the Brazilian Finance Minister Guido Mantega.
Mantega adds the growth in Brazil is based upon positive trends in employment, services and industry. The Central bank of Brazil states that the new figures confirm that Brazil has already come out of recession.
A major factor in the quick turnaround experienced by the Brazilian economy is a series of measures introduced by the Government to incentivise the domestic real estate market and construction industry. Minha casa, Minha Vida has been a huge success and has contributed to the 2.1 per cent increase in domestic spending over last months figures.
Minha Casa, Minha Vida has provided an impressive R$60bn into Brazils affordable housing market, and with the construction industry accounting for 5 per cent of Brazils GDP this has given a valuable boost to employment and earnings.
The Brazilian Government announced that it would plow another R$10 Billion into its flagship affordable housing scheme, Minha Casa, Minha Vida in 2010. The key to this scheme is the Government providing subsidies of up to 90%, which keeps the buyers mortgage payments below 10% of their income. Mortgage payments are guaranteed by a Treasury fund.
Following the French and German economies, Brazil is the latest Group of Twenty economy to emerge from recession. Germany, the Euro regions largest economy, and France, the second largest, both expanded 0.3 percent in the period.