Things Looking Up in Brazil
Brazil is becoming an increasingly more attractive as a place to live and to invest. In September the real pegged a 14-month high against the dollar. Moody’s elevated Brazil’s credit rating to investment grade on. Shortly after, Brazil’s Ibovespa index hit 62,000 points, a target set by many investment banks for year’s end. Moody’s is the last of three credit rating agencies to do this; Standard & Poor’s and Fitch granted Brazil investment-grade status last year.
Investors who have bought property in Brazil have seen steady appreciation, especially in the Northeast. A strengthening exchange rate is significant. The US dollar was worth R$2.33 at the beginning of 2009, but is now only worth R$1.80. (The greenback was worth R$2.65 at the start of 2005 and R$3.54 at the start of 2003.) The euro was worth R$3.71 and R$3.59 at the beginning of 2003 and 2005 respectively, but is now only worth R$2.66.
Earlier this year Brazilian President Luiz Inacio Lula da Silva launched the My House, My Life housing program, with the stated goal of building one million affordable homes. The program has helped create favorable conditions for real estate investors.
Finance for homebuyers has been altered radically since 2007, offering buyers 240-month mortgages instead of ones lasting only 60 months.
Inflation in Brazil stands currently at around 4.3%.