Why Are Global Real Estate Investors Flocking To BRIC Countries?

Bric Real Estate

First Published Date: June 06, 2011

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on June 6,, 2011

The BRIC (Brazil, Russia, India, and China) countries are the world’s largest emerging economies advancing into the next generation with fast and rapid growth momentum. These countries likely to overtake the US economy and would make up 22 percent of the global economy by 2015. However, the property markets in the BRIC countries are still within reach and expected to flourish in the next 10-15 years. The time may be just right for global real estate investors to make some money investing in these countries.

A recent The Knight Frank Global Cities Survey shows that BRIC cities will rise to the top of the list, pushing top western cities like Washington DC, Geneva, and San Francisco to the bottom. Some present-day world-class cities like Toronto and Vancouver fall out of the list entirely. New York and London remain on the top of the list; however, skyrocketed prices in these western cities will be beyond the reach of most investors.

The biggest winners to lead the upswing in global real estate market would be BRIC cities, especially Shanghai, Moscow, Mumbai, and Sao Paulo. Rapidly developing infrastructure to support industrialization, massive land area, abundant raw materials, and taking futuristic steps in the right direction are some of the reasons that would make accelerated growth possible in BRIC countries.

For example, Brazil is now at investment grade status, so investors will probably not be reluctant to pour money into its property market. China recently approved a property tax to tame its overheated real estate market.  These are some of the elements that show this is the time to realise the future potential of the BRIC real estate market. Global real estate investors are keeping watchful eyes on these BRIC cities, as property prices are still within reach and it makes sense to invest in these cities before prices start to skyrocket.

The share of BRIC countries in global GDP is rapidly rising, and so is its real estate market’s potential. As the entry barriers are easing, global real estate investors are slowly and surely moving into BRIC countries.