Investors Set to Increase Holdings in Brazil

A growing number of foreign property investors are preparing to increase the capital which they are putting into the Brazilian real estate market in 2011, according to a new report...

A growing number of foreign property investors are preparing to increase the capital which they are putting into the Brazilian real estate market in 2011, according to a new report. Research by Ernst and Young has found that two-thirds of real estate investors with funds in emerging markets in Latin America have set aside money to buy in Brazil in the coming years.

"It is pretty substantial for a country that less than a decade ago was considered high risk due to an unstable economy, hyperinflation, mounting debt and a volatile currency," Rogerio Basso, from Ernst and Young, said.

The expert added that the country's strong economy combined with an emerging middle class and availability of credit is fuelling investment interest across the real estate spectrum from residential to commercial assets and hotels.

However, the survey also points out that obstacles to successful foreign investment in Brazilian real estate do still exist. High taxes and restrictive labour laws can hamper overall investment returns.

And although financial transparency has improved in recent years, there is still a relative lack of information available to investors, especially related to real estate debt instruments, Ernst and Young reports.

- Monday 13 December 2010

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