New Brazilian regulations 'spur property growth'

Regulations introduced in 2005 have had a real impact on property for sale in Brazil, as well as the whole real estate market in country.

According to the Brazilian Association of Real Estate and Savings Institutions, the number of real estate loans has risen from 53,787 in 2004 to 195,900 in 2008.

Jose Carlos Oliveira, professor of economics at the University of Brasilia, told the Latin Business Chronicle that the changes related to real estate guarantees.

In 2005, the government allowed banks to 'own' a property until the borrower had repaid their loan in full.

"Although this option creates a highly risky situation for the borrower, it makes it possible for the person who provides the funds to have an additional motivation because it permits him to recover the property in case of non-payment," he commented.

Antonio Montes, professor at the Instituto de Empresa in Spain, said the regulations have democratized the real estate market, making it more realistic for low-income earners to enter into the property market.

According to Brazil's finance ministry, analysts are "unanimous" that Brazil is a place where things are "going well" and where companies and banks are "solid". The government expects that that this will reassure investors who are looking for property for sale in Brazil.