Brazil’s elections and the outlook for real estate investment

The first round of the 2026 Brazilian elections has brought real estate investment into focus, as investors reassess financing prospects. According to the GRI Institute, Brazil’s real estate stock index (IMOB) was up 12.9% at around 3 p.m. on October 5, while some listed developers gained more than 20%. These were intraday figures, not closing prices.

The presidential race remains open, with Flávio Bolsonaro and Luiz Inácio Lula da Silva advancing to the second round, as confirmed by Brazil’s Superior Electoral Court. GRI associated the rally with the first-round results and expectations that a more right-leaning Congress would support tighter control over public spending. The anticipated effects include lower interest rates, greater access to credit, and reduced debt costs, with developers serving middle- and higher-income buyers expected to benefit most. These remain market expectations, not confirmed policy outcomes.

It is also important to understand what the index measures. The IMOB tracks the stock performance of listed real estate and construction companies, not the prices of buildings or land. Its rise should therefore be read as a change in the stock market’s assessment of those companies, rather than as evidence that property values increased at the same pace. For businesses considering real estate investment, this distinction helps separate market sentiment from the conditions of a specific project.

The financing outlook after the Brazilian elections also depends on monetary policy. Brazil’s benchmark interest rate, known as the Selic, influences borrowing costs and is set by the Central Bank’s Monetary Policy Committee to control inflation. In its September 2026 Monetary Policy Report, the Central Bank reiterated the need for caution and for interest rates consistent with bringing inflation back to target. This means that electoral expectations should not be treated as a commitment to a particular trajectory for borrowing costs.

For foreign companies assessing real estate investment during the Brazilian elections, we recommend testing each project against more than one financing scenario. The analysis should consider whether the transaction remains viable if borrowing costs fall more slowly than expected. Payment schedules and financing conditions should reflect that assessment. The opportunity lies in preparing for a potentially different environment without treating political expectations as confirmed financial or contractual conditions.

To learn more about these developments and their implications for real estate transactions in Brazil, please contact our Real Estate team.