BRICs and mortars

How worried should investors be about the apparent resurgence of the Cold War between Russia and the west? Was the dramatic slowdown in Brazil’s economy really just a blip? Is China about to suffer its own subprime crash, and how might a make-or-break general election in India affect its real estate market?

It’s now 13 years since the “BRIC” countries were grouped together by Goldman Sachs economist Jim O’Neill. Since his 2001 report, these emerging economies have indeed taken their place among the world’s powerhouses. Their combined GDP has grown more than five-fold and their share of the world’s wealth has increased from 8% to nearly 20%. Even a tiny blip in any one of them sends shockwaves through global markets. With 40% of the world’s population living on more than a quarter of the world’s land area, the BRICs’ growing prosperity made for an apparently unstoppable real-estate boom, barely checked by the global financial crisis. Their demographic momentum and structural undersupply still present undeniable opportunities, but are the rewards high enough to make the risks worthwhile? In this report for Estates Gazette, I examined the prospects for investors in Russia, India and China. (The Brazil section is by EG features editor Emily Wright.)