Brazilian Real Estate on 15-year Cycle | Obelisk International | 13th June 2011 Brazilian real estate is entering a period

of sustained growth likely to last 15 years. This very positive scenario makes investment in Brazilian property a must for any portfolio. In a recent interview, Fabio Nogueira, the founding partner of Brazilian Finance and Real Estate (BFRE), claims that the market for property in Brazil is at the beginning of a long growth cycle. For the founder of BFRE (whose partners include property mogul, Sam Zell), ingredients are in place for this cycle to last between 10 and 15 years. For Mr Nogueira, the Brazilian real estate market has changed fundamentally over the last few years. He points out that property cycles in Brazil were historically short because of financial volatility and economic instability. Erratic conditions meant that cycles within the Brazilian property market rarely lasted for longer than three or four years. New Scenario for Brazilian Property Market This scenario has completely changed and the market now has conditions in place for sustained growth. Mr Nogueira believes the market for property in Brazil now brings together two essential conditions. The first condition is well documented – the huge shortage of housing in Brazil, particularly apparent in the lower social classes. Estimates on the actual number of houses needed to satisfy the demand for property in Brazil run between 7 and 13 million. Some market studies (including Ernst & Young) have found that the shortage will last until 2030. The second characteristic of today’s property market is a more recent phenomenon. Brazil’s current economic strength and stability have led to greater prosperity for all Brazilians. And for the first time ever, many Brazilian families can seriously aspire to homeownership. Not for nothing does the government social housing programme Minha Casa Minha Vida mean “My house, my life”. Stable Future For the majority of Brazilians, the purpose of buying a property is to live in it. Property investment rarely comes into the picture and Mr Nogueira points out that most speculative Brazilian investment is made in the financial sector. He believes that because Brazilians are buying a home, they have much more at stake personally and financially, which adds stability to the Brazilian property market. Further stability is added from the Brazilian mortgage sector. Mr Nogueira dismisses the idea of a credit crisis in Brazil because of the strict lending criteria in place. Most properties need a deposit of up to 40% and bank regulations mean borrowers may only allocate 30% of their income to spend on rental or a mortgage for their property in Brazil. Obelisk International shares this positive outlook on the Brazilian real estate market. Company in-house research suggests sustainable long-term growth conditions are now in place. With this mind, Obelisk International believes that investment in Brazil property also has a long-term future. Contact Obelisk International on 0034 952 820 319. Via email: or visit our website:

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