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Latin Real Estate: Strong Growth Ahead

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The U.S. subprime crisis is having a minimal impact on Latin America's fast-growing real estate sector. Brazil, Mexico and Chile lead the way.

BY JOACHIM BAMRUD

While the U.S. subprime crisis is causing concern in the United States, Latin Americas real estate sector is seeing continued strong demand, helped by record investments, growing economies and years of pent-up demand for new property.

"Clearly the credit crunch in North America has harmed consumer confidence and put some investors on the sidelines waiting to see what it really means," says Blake Hutcheson, president of CBRE Canada and Latin America. "However, there’s still an outrageous amount of capital – all focused on real estate – globally, and Latin American markets are very much in vogue."

Brian Carr, co-head of Morgan Stanley Real Estate Investing – Americas, agrees. "We expect the rest of the year to be moderate, there have been considerable investments in Latin America over the last 18 months and the recent market turmoil in the financial and credit sectors have also impacted, although to a lesser extent, the investment outlook for the region," he says.  "The remainder of the year will see activity in the acquisitions and development areas in the main economies but at a slower rate than the last 12 to 18 months until the credit and capital markets in the United States and Europe recover."

BRAZIL AND MEXICO

Brazil and Mexico are Latin Americas fastest-growing real estate markets, but also other South American markets like Chile and Peru are seeing strong growth, experts say.   Yet, Brazil and Mexico are the big growth drivers.  "New development cannot keep up with demand," says David Berger, managing director for Latin America and the Caribbean for NAI Global. "The growth in the economy and increased disposable income keeps driving the demand."

Brazil and Mexico continue to be the most attractive because of...

Panel of experts and their answers

Keywords: Buenos Aires, Colliers International, Guadalajara, investment rates, Mexico City, Monterrey, NAFTA, Santa Fe, Santiago

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