Is brazil’s property boom starting to slow down?

The Brazilian property boom may be starting to slow down, according to experts.

The country's real estate market has exploded since 2006, with lending expanding at 50 per cent per year all the way to 2012. But now, the rate of expansion is slowing, says Octavio de Lazari Jnr, President of the Brazilian Association of Home Loans and Savings Banks.

The decrease has been attributed to the South American economy, which is also experiencing a slowdown. Brazil's economy was expected to grow by 4.5 per cent at the start of 2012, but that has since been revised to a much lower 1.8 per cent thanks to the impact of the European financial climate.

"Now we are revising our estimate to an expansion of 20pc amid the overall slowdown of economic activity," Lazari explained.

Indeed, mortgage lending has risen this year, but companies are now launching fewer developments, with low demand causing existing, often empty, projects to cost them money.

But some are not worried about the slowing market expansion. Lazari, for example, anticipates an even greater expansion in lending next year.

"It was simply not possible to sustain the previous level of annual growth in lending,"  Jorge Hereda, president of the Caixa Economic Federal mortgage bank, told Overseas Property Mall. "With a more moderate pace of expansion, we're going to see more balanced development."