Brazilian real estate is booming again. After a relatively bad period, sales have rebounded in Brazil, an American real estate private equity investor said in an interview to Reuters last Tuesday.
Launched two weeks ago, a 104-unit residential project directed at middle-income families in Sao Paulo’s Vila Carrao area is the best example of that, Thomas Shapiro, president of GoldenTree InSite Partners, said at the Reuters Global Real Estate Summit. “We sold every unit in four hours,” Shapiro said, adding that the company has recently raised around $500 million to invest there.
When crises arrive, Brazilians traditionally prefer to invest in hard assets
Brazil has kept a low profile internationally in the past few months, he added. That was good for his company to identify good investment opportunities, as local listed real estate companies like Cyrella and Gafisa were suffering with the stock market debacle.
Shapiro said the fundamentals of the Brazilian economy looked better than expected for the year ahead and a stimulus package from the government has helped the real estate market heat up.
He also stated that the upper class in Brazil traditionally prefers to invest in hard assets when crises arrive, but discarded signs of a real estate bubble forming in the South American country, like the one that hit countries like the U.S. and Spain.
High demand in Sao Paulo
Due to a lack of available buildings, it is getting harder to find an apartment or a house to rent in Sao Paulo. In many areas of the city, the number of people searching for a home has more than doubled in some real estate agencies. For low-priced buildings, the waiting time can last four months.
The most sought properties of Sao Paulo have one and two bedrooms, with monthly rent between 1,000 and 1,600 reais – but the increasing demand makes rent prices constantly higher. According a research of the Habitation Syndicate of Sao Paulo (Secovi-SP), rent prices in the city rose around 11,1% between last June and this year’s May.