Over the course of the past few months, we have seen large amounts of data and polls suggesting positive growth in the Brazilian real estate market, much of it based around the considerable increase from the growing middle classes. A new poll of 15 leading financial institutions, banks, business organisations and real estate companies, has now suggested that Brazilian property prices could increase by as much as 10% in 2012, despite reduced GDP growth in the second half of 2011.

The Reuters poll went to show that despite the poor GDP figures, there was little risk of a property market downturn in Brazil at present, predominantly due to the increase in demand from the middle classes. This internal demand for property in Brazil is in line with the shift in emphasis away from rental property over to long term ownership. This increase in demand for property in Brazil has understandably placed upwards pressure on prices and as such the new poll states that a figure of between 5-10% is realistic over the next twelve months.

‘There are structural factors in place to justify such a strong performance. A sharp fall in prices in 2012 is very unlikely,’ said Paulo Cesar das Neves, analyst for the local research firm LCA.

Here at Pureproperty, we have seen considerable demand for Brazilian real estate over the past two years, primarily from investors seeking to capitalise on the considerable potential for growth in the market. With Brazilian GDP growth expected to recover strongly over the next two years, it seems that the increase in demand for vacant land and property in Brazil looks set to continue.