According to the British consultancy Knight Frank, among the 53 countries with the largest global real estate markets, Brazil in 2012 had the highest increase in home prices: 13.7% on average. I decided to upgrade and expand my studies.

A year ago, I used the annual per capita consumption of cement as an estimate of the degree of heating of the activity in the real estate industry in moments of bursting bubbles in several countries. Today, by my count, this indicator reached 361Kg in Brazil. At the average rate of growth over the last 10 years, which was 5% per year, in just two years would reach the lowest level overflow bubbles, which is 400Kg, which would suggest caution. Moreover, the maximum consumption of cement before bubbles burst, in some cases increased from 1.600Kg per capita annual. To reach this level, Brazil would take another 80 years. For this parameter, could be between 2 and 80 years of the bursting of a bubble. Little is concluded.

The second important indicator is the total number of mortgages available. Credit allows more people buy property, increasing the demand for them and raising their prices. In Brazil, despite the growth in recent years, it is still only 7% of GDP, far from the 50% of GDP which is usually minimal when housing bubbles burst. Even considering an expansion to the pace of the last two years, which was 1.4% of GDP per year, the fastest in our history, it would take over 30 years to reach 50% of GDP. Sign of peace.

Finally, how is the ability to pay the Brazilians? Taking into account property prices relative to income in the world, draws attention to wide dispersion among the largest Brazilian cities, with some of the most expensive and the cheapest among others.

Of the 50 most expensive cities in the world, 49 are in developing countries, including four in Brazil: Brasilia (10th), Rio de Janeiro (25th), Belo Horizonte (43th) and Porto Alegre (45th). On the other hand, Salvador is no longer among the 100 world’s most expensive, Fortaleza is one of only 10 cities among the 50 cheapest in the world that are not in the USA, and Campinas is also among the 100 cheaper. Among the 385 largest global real estate markets, the average rating of the 11 Brazilian cities included was 124th, suggesting that the Brazilian market as a whole is a little more expensive than average, but far from the most expensive on the planet. Among the emerging markets, Brazil is cheaper than the average.

Another favorable aspect is that a smaller percentage of income needed to pay monthly mortgages suggests that in Brazil we have better ability to honor debts. Furthermore, comparing the price of buying real estate with the cost of renting it, it appears that high rents in Brazil stimulate more purchases than in the rest of the world. Finally, the devaluation of the real estate cheapened in Brazil for foreign buyers.

In summary, although some cities suggest more caution, for the country as a whole, the findings still hold last year. Low or high maintenance prices are likely in most cases and the risk of immediate burst of a national housing bubble is still low. If you are hoping prices plummet to buy, wait sitting. According to Plato Courage is knowing what not to fear.

Source: http://www.administradores.com.br/artigos/administracao-e-negocios/bolha-imobiliaria-estourando-onde/69985/