subject: Need To Know Information On Brazilian Mortgages For International Property Investors [print this page] Such is the strength of the Brazilian mortgage market at present; a number of the biggest banks in Brazil and across the globe are locked in intense competition in order to gain a bigger share of the rapidly growing mortgage lending market. With many of the banks offering incredibly low rates and longer repayment conditions, the demand from consumers has seen a massive surge.
To put things into perspective, it is anticipated that the home-loan market will see growth figures of up to 30% in 2012 alone. This exponential growth has been attributed to the fact that, for many Brazilian people, the Brazilian Real Estate Market has been made far more accessible in recent times than ever before.
Many people in Brazil can now afford to take on mortgages with demand for home-loans rising rapidly and with a housing shortage of 6 million units; competition to secure these mortgages has become incredibly intense.
Waseem Saddique comments: Whilst Brazilian people are not well renowned for borrowing money, the credit is now available, for first time buyers in particular, to take advantage.
For property investors, the incentive is to purchase homes whilst mortgage interest rates are incredibly low and rent those homes out or sell them on in order to enjoy lucrative profit margins. At present, Brazils top Government-run bank, Banco do Brasil, has slashed interest rates to 7.9% for borrowers who open an account and keep up-to-date with payments.
Property investors in particular can take advantage of a fast growing market. In 2011 the Brazilian mortgage market grew by 42% and in 2010 it grew by a massive 65% and there is still room for further growth (Source: Bloomberg). Although mortgage lending is increasing at a slower pace, the potential for growth is vast and the market is incredibly healthy.
In its current state the home loan market accounts for just 5.3% of gross domestic product in Brazil, this compares with 81% in the USA. This means that by 2020, if the Brazilian market grows to achieve 16% of GDP, the market would be worth 1 trillion Reais according to the Banco do Brazil.
Waseem Saddique comments: Brazilian banks themselves are competing for a volume of credit that is bigger than the whole portfolio of many institutions in Brazil.
What makes the whole situation even more attractive for Brazil property investors is the availability of property in the Brazilian nation. The Brazilian Real Estate Market is thriving as housing development projects spring up all over the country, situated in prime locations and at prices that are proven to be a better investment opportunity than anywhere else in the world right now.
