Amongst wide scale speculation on the back of rapid price rises in recent years, one of the country’s foremost house builders recently stated that the chances of a major crash are very slim in Brazil.

In an interview with prominent newspaper ‘Globo’, Wilson Amaral of Gafisa stated: “the housing market is still in the very early stages of development” illustrating that income growth, lower unemployment, inflation control, credit supply and a demand of 1.5 million extra units per year will all keep the market buoyant.

Possessing a 5 percent market share, the company is listed on Brazil’s Bovespa stock exchange with a revenue of R$ 120 billion between January and September 2010 – R$ 79 billion of which was via customers purchasing with housing credit.

With reports of house prices increasing as much as 50 percent in the space in 2 years, particularly in the major metropolitan regions of the country, Amaral pointed to more controlled prices rises in the coming years.  He believes that the excitement was attributed to the fact that financed real estate releases for the middle and low income brackets were rare until a few years ago.

He also pointed to changing attitudes stating that: “before a Brazilian person would marry, enter a house and die in the house.  Today, a trend is emerging where more people are buying and moving more often – which will help keep the sales market active.”

Ruban Selvanayagam

www.brazilinvestmentguide.com