Saturday, June 10

50m new Brazilian consumers – santosbrasil

The number of middle and higher class citizens in Brazil has increased by more than 50m people since 2003. Since January 2009 alone, according to a study by FGV the top of the social pyramid grew 12.8% and the middle class (C) grew 11.1%, reaching a total of over 100m alone now living with middle class standards.

Importantly however, unlike inflationary growth in ‘developed’ countries that was experienced during the previous decade, Brazil’s growth is not based on increased debt. Stable inflation coupled with economic growth and wage increases have resulted in steady and sustainable growth.

Importantly for Brazil real estate investment, this will not result in a Brazil real estate bubble as still less than 5% of real estate value is mortgaged. For the detailed story click here.

Brazil lowest ever unemployment – santosbrasil

May 2011, Brazil’s unemployment rate falls to the lowest rate ever, whilst the rest of the developed world struggles on. The jobless rate fell to 6.4 percent in May, the lowest since statistics began in 2002.

As Latin America’s biggest economy continues to hire more and more workers to meet growing domestic demand, average real wages also rose – by 4 percent year-on-year to 1,567 Reais (US$988) per month.

Record low unemployment coupled with a “substantial” increase in wages are an “important risk” for inflation and a driver of economic growth, central bank policy makes stated in their June board meeting.

For the full story on economic growth and control, visit Bloomberg.

Brazil super yacht market growing – santosbrasil

As mentioned in the Financial Times this week, the Italian luxury yacht builder Ferretti is turning to the new super rich of Brazil to increase sales by up to 15 per cent annually during the next three to four years.

The CEO of Ferretti told the FT that due to Brazil’s love for yachting, the hundreds of harbours and yachting clubs, its 7400km of stunning coastline and the year round warm weather, Brazil was a natural market to focus on. With Brazil’s rapidly growing economy the yachts are now more affordable to Brazilians then traditional markets.

According to Dasein Executive headhunters, chief executives and directors in Sao Paulo earnt more than in London and New York last year.

$47bn set aside for Brazil housing – santosbrasil

Last week the Brazil government confirmed its financial strength and stability by announcing over $47bn dedicated to housing construction loans over the next 3 years. With a housing deficit of around 9m units, these affordable houses are desperately needed and cater to the middle class market with properties valued between US$30,000 and US$80,000. Instigated via the government’s “My House My Life” program this effective real estate construction boom is fuelling strong growth amongst numerous Brazilian developers, in turn increasing private equity and FDI (Foreign Direct Investment) in to Brazil, further strengthening the economy.

Considering the increasing consumer wealth it is not only residential real estate that is receiving interest from overseas investors, but a rapid boom is occurring with commercial space including shopping malls that have produced some of the best results for various investment houses over the past few years.

A country with such extensive natural resources, and deep pockets of cash savings, Brazil’s future seems very bright indeed.

Brazil mortgage market 51% growth – santosbrasil

Crucial to the growth of any real estate market is the influx of credit. In our “developed” markets we know this only too well following rapid price growth and crash at the hands of over-zealous banks in the last decade. With high gearing ratios still in place price / funding sensitivity is still very high and the market still nervous.

Now imagine a different market; where values are real, prices tangible, where banks have funded only a tiny percentage of the total market value, where the price is effectively the cash price and where you know the price is determined by pure market demand and supply and local affordability. That market is Brazil.

In 2010 Brazil mortgage debt was only 4% of GDP, compared to around 70% in the US and most of Europe, resulting in a stable market with prices relatively insensitive to funding. With a shortage of 9.1m homes and a wealth of cash reserves the Brazil government can afford to slowly, carefully, inject cash in to the system, helping those that want to own their own residence and probably having a minimal effect of raising prices. As such the government has the goal to reach 11% of GDP as mortgage debt by 2014.

Luiz Antonio Franca the President of ABECIP (Brazilian Association of Savings and Loans) stated that 2010 was the best year in the history of the real estate market for Brazil; in 2010 housing mortgage debt reached R$ 56.2bn, outstripping figures registered in 2009 of R$ 34.0 billion, and in absolute terms the number of signings made by agents of SBPE (Brazilian Savings and Loans) amounted to 421,400 units, a 39% increase over 2009.

As of today the total number of units financed has now reached 1.052m, an increase of 57% over 2009, but still an incredibly low number when you consider the country’s population of 290m people. In 2011 ABECIP forecast that mortgages will grow 51% to reach R$ 85 billion and there should be 540,000 new mortgage units funded.

9.1m Brazil families need real estate – santosbrasil

National real estate prices are being driven upwards in Brazil supported by an enormous internal demand from middle class families.

According to a recent survey carried out by the Data Popular Institute there are now 9.1 million Brazilian families in Brazil that plan to buy real estate in Brazil over the next 12 months. These families are termed as “middle class” meaning that they have between 3 to 10 times the minimum salary. They are one of the world’s fastest growing middle classes and are the engine behind increased consumer spending and the high demand for homes in Brazil.

This huge increase in the number of middle class families with increased spending power is due to several factors such as the increase in salaries, wider availability of credit and also better education, all a result of the booming Brazilian economy.

For the first time ever Brazil’s middle classes can now acquire mortgages, never previously available, and these are offered at reduced rates to qualifying families so monthly mortgage payments are invariably cheaper than rent.

Brazil record economic growth 7.5% in 2010 – santosbrasil

Brazil’s economy grew by 7.5% in 2010, the fastest since 1986 and the 3rd largest in the world behind China and India.

Overall the economy grew 7.5% with gross domestic product (GDP) of Latin America’s biggest economy reaching 3.67 trillion Reais (US$2.21 trillion), according to figures released by the Brazilian Institute of Geography and Statistics (IBGE).

The IBGE attribute the high growth rate to the increase of domestic demands in the country, with industry (expanding 10.1%) being the highest growth sector.

Brazil’s economic growth surpassed countries such as South Korea, Japan, Germany and the United States and also exceeded the 5% world average GDP growth.

Brazil is booming like the “US in the 1950s” – santosbrasil

Brazil is booming and brimming with business opportunities—like the “US in the 1950s”—billionaire businessman Sam Zell told CNBC Wednesday. He said if Brazil continues on the same course, he predicts that the “fiscally conservative” nation will soon be one of the top two countries in terms of growth.

CNBC Full Story:

Brazil purchasing power in NY increases US-Brazil flight routes – santosbrasil

The number of Brazilian tourists who travelled to New York increased 41% to 359,000 last year from 2007, making visitors from Brazil the eighth-largest group arriving in the city. Demand is so strong for travel to New York that American Airlines is adding 11 flights a week between the U.S. and Brazil beginning November 18th, the Texas-based air carrier said in a statement on June 24th.

In the country of more than 193 million people, Brazil now has more billionaires than any nation in Latin America according to Forbes magazine, whilst the number of millionaires jumped 19% to 126,882 from 2008 to 2009, according to Boston Consulting Group data. Gross disposable income in Brazil advanced 54.3% from the time President Luiz Inacio Lula da Silva took office in January 2003, the national statistics agency said in an e-mail statement July 16th.

The Brazilian Real has also rallied 100% against the dollar since 2003 and jumped 33% in 2009 alone; the best-performing currency in the world; helped by revenue from exports of commodities such as coffee and soybeans and demand for the nation’s stocks and bonds. First quarter economic growth of 9%, the fastest since 1995, was driven by consumer spending, as retail sales climbed 15.7% in March from a year earlier, the most since at least 2001. Gross domestic product will expand 7.2% in 2010, the quickest pace in more than two decades, according to a central bank survey of about 100 economists published July 19.