Buying in Rio, Brazil

Brazil's the kind of market that can go bust in a heart beat. The property markets have been running red hot since 08 and credit went crazy over that time fueling the property market. The Olympics is also adding fuel to the fire at the moment. I remember the same kind of thing in Sydney around 2000.

They have big problems economically that are only being exacerbated by the global slowdown. The risk with Rio is that a post Olympic boom tends to see property markets either drift or retrace for few years and that's in relatively good economic times. The Rio market looks like it has a better than 70% chance of a correction over the next 5 years. The question will be how much higher will it go before it corrects and what would a correction look like.

The risk is that the market could rise another 20% but retrace 30%+ after the Olympics. Any post Olympics could be magnified by both national and global economic woes.

Personally I think you're going into a high risk market at almost the top of it's cycle. You're not likely to get much help with the currency either. Inflation is a real problem and that's pushing interest rates up putting pressure on borrowers. The economy has basically stalled and wages have stagnated. There seems little to support an over heated market other than hope and hype. To me it's a speculators market that could pop at any time.

It's the following the same pattern of most failed property markets globally. It might last another 2 -4 years. Who knows.

If you're going to have a go good luck. You'll need it.