The reason for the growth

Cities are expanding, and population growth could be no different. Along with this, the real estate sector follows this evolution and every day grows along with the development of the cities.

The real estate market always seeks solutions that are beneficial to companies, real estate fund investors, construction companies, contractors, and mainly, to homeowners.

With every building, construction, or condominium that is built, hope is born, and along with it, the fulfillment of several dreams. When a family acquires a property, they not only conquer their own living space, but also fulfill the dream of a lifetime.

 

Greater offer of real estate credit

The real estate sector has been registering positive numbers, which gives more security to those who want to invest in real estate. In this recovery movement, the expected gradual growth is being confirmed. What occurs today in the market is a large offer for low-income profiles, which serves to generate a heating in the real estate sector. The National Monetary Council (CMN) seeks to facilitate the competition of builders and developers with the new rules.

The CMN’s programming came into effect in January 2019, when the funds from savings intended for real estate financing started to be released for other lines of credit linked to the sector. With this, there are prospects for an increase in the ceiling of the value of the properties financed. This generates an increase in the range of customers who can benefit from the popular financing of real estate, growing the real estate sector even more.

The heating of the economy generates greater demand for leases in the logistics sector (space in commercial and industrial warehouses), retail and office space, and this makes the portfolio of real estate funds continue to be full of assets with good income performances. In 2018, for example, the market for high-end commercial slabs in São Paulo closed with a vacancy rate around 18%, today it is at approximately 15%, and in some regions considered ‘premium’, it reaches less than 10%, according to reports from real estate market consultants in the São Paulo capital.

 

Risks in the real estate market

Although the growth scenario is favorable, it is of utmost importance to always be aware of the possible mishaps and risks that the real estate market may offer and try to prevent them from happening. VRV has prepared some tips, check them out:

  • Market Risk – It represents the price variations, besides the oscillation of other variables involved in the total operation;
  • Liquidity Risk – It is possible that when you want to recover the investment, there simply are no interested buyers. This leads to a delay in the return of the amount invested;
  • Credit Risk – In this case, if a buyer has problems honoring the payments, it can generate losses and financial hassles for the construction company;
  • Accident risk – Accidents caused by human error such as fire or poorly designed engineering;
  • Risk of expropriation – If for some reason the government agencies decide to expropriate the location of your land, unfortunately it is difficult to reverse this situation quickly.

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