Understanding the drivers of the real estate market in brazil – demographics, expanded credit and a growing middle class

Moderated by Richard Strasser, Director of Contrarian Capital Management, the panel also included Daniel Cherman, Managing Director and Country Head of Tishman Speyer, Luis Largman, CEO of PDG Securitizadora, James Worms, CEO of Paladin Realty and Alessandro Vedrossi, Executive Director of Brookfield Incorporações.

In the very beginning of the agenda there was an identification of some relationships between the number of releases versus existing homes and the number of people per household in the Brazilian market compared to mature markets.

Besides the comparisons that show a favorable scenario for the growth of residential and commercial real estate, other factors were identified to drive the expansion of the sector, with emphasis on: (I) the current demographic wave in Brazil, (II) a lower level of unemployment, (III) the rise of the middle class and (IV) the access to credit for both companies and for customers.

The discussion also exposed the difficulty of creating good landbanks due to poor infrastructure in Brazil, the huge difficulty with approvals from regulatory bodies, the local risks given the peculiarities of some markets in Brazil and the difficulty of obtaining skilled labor are some of the risk factors for the real estate market.

- Original content provided by an on-site blogger at the Brasil Investment Summit