The Brazilian mortgage market is still in its infancy,
but the
housing market received an enormous boost in
2008 with
the introduction of mortgages for Brazilian
nationals.
Brazilians have traditionally bought homes
with cash
because of very high interest rates, but now
rates have been
significantly reduced – the latest rate
cut was in April 2009,
when it was lowered to 10.25%
- mortgages are more
affordable and demand is likely
to increase.
Mortgages are slowly becoming more available for
non-
residents through some banks and once this market
develops it is thought that it will substantially open up
the
property market.
According to Joao Crestana, President of
the Sao Paulo
Real Estate Association, mortgage loans
represent a
mere 2% of Brazil’s GDP, compared to 69% in
the US. |
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|
However, although the Brazilian mortgage market is small,
it is growing fast. Brazil's Central Bank reported a 37% year-
on-year increase in mortgage loans from February 2008 to
2009.
Increasing demand from domestic buyers is boosting the
mortgage market and by extension, the property market.
Brazilian banks are continually introducing new mortgage
products for Brazilians and lending terms are becoming more
flexible.
However, according to Forbes, the term ‘subprime' is virtually
unheard of in Brazil because of strict government mortgage
regulations. |
