I'm moving to Brazil later this year and will be getting married to my fiance who has been a permanent resident of Brazil for 30 years. We are considering buying an apartment in Campinas, but based on everything I've read, the Brazilian real estate market seems to be experiencing a housing bubble with home prices in Rio and SP having jumped over 250% and 200%, respectively since 2008. While I know that a lot of the excitement surrounding Brazil is over this year's World Cup and the 2016 Olympics, beyond these two events, has there been enough economic growth and investment to justify such an increase in home values? What are the prospects for continued growth in the future after the Olympics? Is Brazil really caught in a housing bubble? If so, when will it burst?
As I understand it, the rise in homes values seems to have slowed in recent months - while values are still increasing, they're increasing at a much slower rate. Also, interest rates are sky high at the moment - to curb economic activity and inflation. I don't know too much about what's going on in Brazil, but common sense tells me that now is not the time to buy (Housing prices are at an all-time high, interest rates are high). If we do buy in the near future, we'll most likely pay in cash and only take out a mortgage if we need to, so interest rates don't concern us as much, however, since high interest rates are used to deter investors, I'll take this as a sign to wait...until the market collapses. But will it collapse? Or will it just slow down? I'm an American and after having seen the devastating consequences of our 2008 housing crisis and the ripple effect in other countries around the world, I am very cautious. While I don't think the current Brazilian housing market is in as bad shape as the 2008 American housing market, I still think that waiting is best unless we find a killer deal.
My fiance tells me that many are predicting a fall in prices after the Olympics, but even he's not sure when it will happen. What are your thoughts?
Victoria
Some of my sources:
http://www.bloomberg.com/news/2013-09-0 … razil-credhttp://www.bbc.com/news/business-27202147http://www.bbc.com/news/business-27218510http://www.forbes.com/sites/kenrapoza/2 … pace-all-c[link under review]http://www.brazilinvestmentguide.com/bl … le-brazil/