The equity markets have been responding positively. So far this year, 36 percent of inflows to emerging market equity funds have gone to Brazil. Homebuilders have been major beneficiaries, as investors react to the interest rate trends as well as the overall investment environment. According to a JP Morgan analyst, "We see Brazil as the country with the most policy flexibility in the emerging market universe, with the capacity to continue to cut interest rates and provide for fiscal stimulus if growth were to weaken."

The prospects for continued credit expansion appear quite good. With mortgage lending at a relatively low level from a global perspective, and with banks operating at responsible leverage ratios, the credit markets have plenty of room to grow. The Rousseff government has made it a clear priority to improve loan availability, increase home ownership, and carry forward the strong growth of the middle class.

For property investors, interest rate and credit trends indicate a sustained upward trajectory for Brazil's real estate values.