A crucial reality check to check to which extent real estate selling prices are real is to keep an eye on the rent versus selling prices index.
We checked today the rental prices evolution of the last 6 months in Ipanema, Leblon and Lagoa in Zona Sul. We are not talking bout temporary rental, but long-term local rental prices.
On average, rental prices went up by 18%, the last 6 months, that is 36% on a yearly basis.
The medium monthly rental price for a 3 bedroom appartment is now:
Ipanema: R$ 5.534 (2.128 €)
Lagoa: R$ 3.671 (1.411 €)
Leblon: R$ 5.240 (2.015 €)
By way of comparison, medium selling prices for a 3 bedroom appartment are now:
Ipanema: R$ 967.000
Lagoa: R$ 875.230
Leblon: R$ 1.148.624
Supermarket sales in Brazil went up 7,3% compared to the year before. The sales rise resulted largely from the further inclusion of social classed D and E. This social progress of this enormous slice of the population underlines the growth potential ahead.
Unemployment dropped in October to an all-time low of 7,5%, while average income rose 3,2% year-on-year to R$ 1.350 (770 USD)
Also important: the consumer price index is running at a 12 month rate of 4,27% as of October, comfortably beow the government’s official goal of 4,5%. With inflation under control, the central bank keeps its Selic base interest rate at 8,75%, the lowest rate ever.
Chinese real estate has been booming. Since 2000, year estate investments grew 200% in China. The Chinese Claymore/AlphaShares China Real Estate ETF (TAO), which tracks Chinese Real Estate went up more tan 70% since January 2009.
If there is one thing that Europa underestimates than it’s the impact of a bursting Chinese Real Estate bubble. The bubble has grown mainly on the residential side of teh market, but with Beijing’s 4 trillion yan or 586 billion USD stimulus package, the bubble also started growing on the commercial side in 2009. Remember that China pumped worth 12,9% of its GDP in stimulus packages in 2009. By way of comparison: Brazil invested less than 2% of its GDP in stimulus packages to support growth.
With 70 percent of real estate investment in China coming from bank loans, a dramatic drop in land values could send shock waves throughout the economy.
Stratfor published last week an excellent report on the Chinese Real Estate bubble, you can read it here.
Especially in Beijing and Shangai the situation is dramatic. In both cities, real estate activities have accounted for more than 30% of the GDP since 2000. In Shangai real estate activities even contributed more than 50% of the GDP. A GDP which is sustained for more than 50% on an inflated real estate bubble…
No doubt there is a correction ahead on the stock exchange, but when one adds thhe extent of the inflated China real estate bubble, one could wonder how big the downward slope ahead could really be.
Last time we were in Montevideo, the works of the new container terminal (the biggest of South America) ongoing. This week, Katoen Natie, the Belgian value-added logistic operator opened its new 190 million USD container terminal in Montevideo. Katoen Natie is much more active in Latin America than it is in Asia, it has more than 30 operations in Brazil.
Meanwhile, the family Huts of Katoen Natie is also active as a project developer in Uruguay, building a complete town: Jacksonville, in the Zonamerica. They bought the Alesianen convent with 560 hectares and are making alotments in that zone with schools, hospitals, a Regency hotel,…
The quality of Belgian newspapers today is quite in contrast to the quality of Brazilian newspapers. De Morgen started its downward trend from 2006 on and now also De Standaard became pure pulp and Bloomberg copy- paste.
We follow-up news in Brazil through O Globo and Folha Sao Paulo. Both excellent newspaper, but you need a subscription on the printed edition before you can browse the digital edition online. Globo even launched its digital version on Kindle, the first newspaper in Latin America. And of course you had Brazilian economical newspapers like the excellent Valor Econômico or Jornal do Comercio. But it they could never seduce me to take a subscription, for the same reasons as De Tijd and De Standaard in Belgium can no longer seduce me to take a subscription: a lack of true journalism and too much copy-paste of online material that is freely available.
The Portuguese Group Ongoing, which published “Diario Econmico” in Portugal launched “Brasil Econômico” this weekend. Ongoing is the private investment vehicle of the Rocha dos Santos family. They have a focus on Telecom, Media, Real Estate and Financial Services with georgraphical focus on Portugal, Portuguese speaking countries, Africa and Spain.
The newspaper launched on a print run of 55.000, that is more than the 47.700 run of De Tijd in Belgium. Smart move of the Rocha dos Santos people.
Uma vida prática e com muito estilo, é o que o empreendimento Le Jardin tem a oferecer a você e sua família. São três casas independentes cercadas pelo verde em um dos bairros com mais qualidade de vida de Florianópolis.
O empreendimento Moradas da Ilha, oferece a oportunidade única de morar em casas cercadas pelo verde em um dos bairros com mais qualidade de vida de Florianópolis.
