The Brazilian real estate market is experiencing the beginning of a new expansion cycle. That’s what industry experts say in the face of: falling interest rates, new property launches and sales, increased incentives for housing programs, a new wave of optimism.
#1 Falling interest rates
Since the beginning of 2019, numerous interest rates have been reduced.
The most recent example is the 0.5% reduction in the Selic, a cut that directly impacted the real estate market.
Thus, the expectation for the coming months is that banks and other financial agents will increasingly pass on the drop in these rates to those willing to finance a property.
A few months ago, a new Caixa Econômica Federal mortgage loan was also announced.
#2 new real estate launches across the country
Across Brazil, the number of real estate launches grew about 11.8% in the second quarter of 2019 compared to the same period in 2018, according to data from the Brazilian Chamber of Construction Industry (CBIC) .
This percentage is equivalent to 30,607 new units.
Thus, this growth contributed to the increase in the closing of property sales, which rose by 16%, reaching 32,813 units – compared to the same period.
Follow this growth in each region of Brazil, in the chart below:
In fact, it is possible to see that investment in real estate in Brazil has grown a lot in recent months.
Thus, with a greater number of sales than launches, the real estate inventory (which is considered on-plan properties , which are under construction or are newly built) decreased by 8.7%.
This is encouraging both for builders, developers, and for those thinking of making an investment in real estate in the coming months.
#3 increased tax incentives and investment in real estate financing programs
Another factor that has profoundly impacted not only the present of the Brazilian real estate market but also its future, is the increase in tax incentives given by both the government and the private sector.
An example of this projection is the creation of a new housing program for 2020, which could guarantee an amount of R$ 450 million, according to Deputy Domingos Neto (PSD). .
In addition, there are other incentives for different types of real estate financing, such as the Minha Casa, Minha Vida (MCMV) program.
The expectation is that it will undergo an expansion still in 2019 and 2020. This will allow more centers with low and medium family income to join the program.
#4 Optimism and good air among investors and consumers
It is undeniable that the economy is showing signs of improvement, which has helped to increase the population’s purchasing power, with money circulating once again in the market.
Thus, given a scenario with low interest rates and with the return of growth in real estate speculation, it is noticeable that a wave of optimism has taken over investors and buyers.
When is the right time to invest for real estate?
The current situation of the Brazilian economy has proved to be very favorable for those who wish to invest in real estate.
For this, you need to be aware of your finances and have a very structured planning about this type of investment.
Thus, you will be able to identify if what is the ideal time to make an investment in real estate.
To do this, balance your pros and cons:
Investment in real estate: advantages and disadvantages
Anyone who wants to invest in real estate needs to evaluate some advantages and disadvantages of this endeavor to make sure it’s worth it:
Financial security and stability
The investment in real estate is a very safe way to ensure a source of passive income for life.
After all, after paying off the property, a very interesting option is to rent this project and continue investing in the acquisition of others.
Thus, your initial investment will continue to be amortized over time. In fact, investing in rental properties is good business!
Constitution of equity and good return
Another positive factor in investing in real estate is the possibility of building and increasing your equity.
After all, buying a house, apartment or land is a sure way to generate and contribute to your income growth.
That way, when the property is paid off and you put it up for rent, the income generated from the lease will be enough to offset the payment of installments, fees, taxes and other expenses for future acquisitions.
High liquidity and tax benefits
Those who decide to invest in real estate rely on the appreciation factor for real estate speculation, which is cyclical and constant.
It is noteworthy that when the property is sold, you can count on the advantage of the home rental market to have short-term contracts in relation to commercial ones.
Thus, at the end of each contract, you can readjust these values according to inflation and also the valuation of the project.
In addition, there are numerous tax benefits and types of real estate credit that are provided by the government and financial agents, such as Minha Casa Minha Vida, among others.
Investment with great return
In the end, investing in real estate brings a great return not only economically, but also, in relation to your income, financial stability, which can help you.
It is worth noting that the real estate segment offers good returns to the market and does not offer much volatility.
Thus, a fundamental benefit of investing in real estate is its great potential to generate income, especially in the long term, as the financing is paid off.
To own a property, you need to bear the cost of its acquisition beforehand. Also because there are some interest rates that involve this type of venture.
The good news is that the trend is for these rates to continue decreasing in the coming years, as we have already seen.
Different types of investments involve taking risks. This is a basic question of economics.
This is part of the nature of entrepreneurship and, therefore, it is necessary to be prepared to deal with setbacks, adversities or any kind of unforeseen situation of putting houses for sale.
Now that you’ve seen some pros and cons, check out foolproof tips and what factors to consider to make a good real estate investment.
Foolproof Tips to Make a Good Real Estate Investment
Check out some of the master’s tips below and what to consider to have good results in your real estate investment:
#1 Think ten years ahead of you
Evaluate the long-term investment. Before purchasing a property, check:
- If The Region Is Well Located And Has A History Of Appreciation,
- There Are Prospects For Urbanization – Which Contributes To Its Growing Importance;
- The Value Requested For The Property Is Below Current Inflation;
- Whether There Is Any Scope For Its Appreciation;
These are factors worth considering when making a conscious and well-planned real estate investment.
#2 what stage is the project at
Each stage of a property has its peculiarities in the negotiation.
Therefore, when thinking about making an investment in a real estate fund, you need to know in depth every detail that permeates this negotiation.
Basically there are three types of internships in which you can acquire a property: in the plant, under construction or new property.
- In The Plan: It Is Normally Divided In Installments during Its Construction. The Values Of The Installments Are Usually Changed According To The National Construction Cost Index (INCC).
In this type of investment, it is common for developers and builders to offer some kind of discount, in case of advance payment.
- Real Estate Under Construction: In This Case, It Is Worth Monitoring The Progress Of The Works And Being In Contact With The Developer You Are Doing Business With.
It’s also interesting to check if everything goes according to schedule and what was promised in the plant.
- Newly Built Properties: New Properties Have The Advantage Of Being Even More Attractive To Future Buyers And Investors.
After all, a new venture presents itself as a great opportunity for movement in the segment.
#3 your goals
What are your goals and objectives for the future? What do you want with investing in real estate?
You need to keep this very clear in mind, as your goals will be your compass when thinking about what strategies to take and how to proceed with your negotiations.
Therefore, make a spreadsheet or contact professionals in the field or institutions that can solve your doubts and help you in this endeavor.
#4 who do you do business with?
Before thinking about any type of investment in real estate, it is worth doing a careful research about the experience and suitability of the builder or developer with which you are going to do business.
After all, this is a great time in your life, so it’s best to avoid inconvenience or burnout.
After all, is investing in real estate worth it?
All socioeconomic factors are favorable for those who want to make an investment in real estate.
But to be worthwhile, you need to close a deal with an institution that is trustworthy and has truly differentiated ventures, such as Prestes.
Prestes is a construction company that has market authority and since 2009 has been delivering high-performance properties.
All this with affordable prices and financing arrangements make the dream of homeownership even more possible.