Brazil Economy & Investment
BRAZIL’S 91 MILLION MIDDLE CLASS OPPORTUNITY
Agents selling Brazilian property are hoping to attract foreign investors with the news that the country’s middle class has grown to include 91 million people.
Brazil’s middle class now represents 49% percent of the population and accounts for 46% of the national income, according to a report by the Getulio Vargas Foundation. The number of middle class people in the country has grown by 42% since 2003, when the number was 64 million.
The shortage of low-cost housing in the country is well publicised, but the growth of the middle class is also creating a demand for higher quality property. “What was seen as up-market apartment ten to fifteen years ago, currently is the basic requirement of a middle-class apartments,” said Abner Brito, client manager at agent Kapital International Investment.
Second homes are also becoming increasingly popular among Brazilians, he said. “The Brazilian middle class are applying their savings to a second home in order to have a second income.”
Foreign attraction
The rising Brazilian demand provides foreign investors with an exit strategy, according to Samantha Gore, sales and marketing manager for Spain-based agent UV10, which sold out a 42-unit development to foreign buyers between November 2009 and February 2010.
Developers can sell more quickly to European investors at below-market values and move onto to developing more projects, she said. “Buyers have been bruised in the past so many are going in with lower level investments, but we’re selling a higher volume than last year. Some people are buying as many as four apartments in one go.”
Many agents are focusing on property in the northeast of the country, partly due to its tourist appeal to both domestic and foreign buyers. “Although the area has traditionally been poorer, a disproportionate number of people are moving from low to middle-income groups,” said Gore. “It’s got very high growth potential and there’s more space to develop in somewhere like Natal than in Rio.”
Source: opp.com