This is a factor that should be taken into account when addressing a potential property investment, in fact if you’re there for the long term hold as many, if not most property investments should be viewed, then the population in general should be a considered factor.
Lets look at the demographics of Brazil and the effect, or likely effect, on Brazilian property.
Population: 183 million (there or thereabout)
Growth rate: 0.548%
This means that each year there are 1.8 million “new” Brazilians that need housing, that means that there is an ongoing sustainable need for approximately 900,000 new homes in Brazil each year.
Combine that with the fact that a lot of the city centre and outlying area housing is due for replacement then we are talking about a substantial demand for new property and currently construction cannot keep up with demand therefore putting Brazilian property at a premium and a valuable asset that is appreciating in value, especially 1st homes (small apartments on the outskirts of cities) and also 2nd homes in the North East for the emerging middle class that tend to holiday in either Rio or in and around Fortaleza.
So, my opinion? For me if you are looking at the Brazillian property market with a Buy To Let eye, then small apartments outside Sao Paulo are your thing.
If you are looking for something more flexible and short to mid term then the North East, specifically north of Fortaleza would be my primary choice as you are not limited to a resale to the domestic market but also to the huge numbers of foreign 2nd home buyers and investors.
This was the route I have chosen to take and so far things are looking particularly good, all being well I should NET an annual return on capital of around 30% with an exit within 2 years. In fact I have already received offers that would see a greater NET return than this but I am choosing greed, and holding firm with my real estate holdings for now.