The Carnival Is Over

Years of strong growth seem like ancient history in Brazil as the country’s property sector is stymied by recession and political crisis

- Duncan Forgan

The names Pele, Socrates and Ronaldo are as emblematic to Brazilians as other national icons such as samba, carnival and the statue of Christ the Redeemer that spreads its arms wide over Rio De Janiero’s sparkling cityscape.

The footballers, figureheads of three of the country’s greatest World Cup teams, encapsulate an ebullient self-image that was, until recently, bolstered by an economic boom fuelled by commodity prices, the discovery of massive offshore oil deposits and a splurge of government spending and subsidised credit.

After a disastrous few years marred by deep recession and political crisis, however, the current mood is sour, divided and uncertain, with the real estate market among the casualties of the crisis. In fact, experts in the industry say the country is suffering a crisis of confidence more in tune with Brazil’s disastrous 7-1 defeat to Germany in the semi-final of the 2014 World Cup than imperious previous incarnations of the national side.

“At the present time, nobody is looking too far ahead,” said Marina Cury, president of property services company Newmark Grubb Knight Frank Brazil. “Over the last few years, Brazilians have become used to short-term thinking. We don’t even know the identity of our next president or whether he or she is equipped to pull us out of the hole we are in.”

The sprawling nation, the largest in South America, was once hailed as one of the world’s most promising emerging markets with the International Monetary Foundation (IMF) putting its long-term potential growth rate at 4 percent in 2010.