Residential properties -- even ones that haven't even been built yet -- are being snapped up in Brazil this year. Cocktail parties where real estate agents pitch their offers to interested buyers have become a common occurrence in the country's major cities in the last few months.

The buying frenzy is the result of a sharp fall in mortgage rates to single-digit figures in 2009. Before the rate drop, the country's mortgage market was relatively small, as Brazilian interest rates have historically been among the highest in the world. In the first half of 2010, mortgage lending rose to a massive BRL23.8 billion (USD13.6 billion), a 77% year-on-year increase.

The construction industry grew 15% during the first half of 2010 compared with the same period last year, outpacing the 9% GDP growth.

The rise in demand has also caused the price per square metre in Sao Paulo to double, according to real estate research company Embraesp.

The rapid price growth is worrying some industry experts, who fear a property bubble developing.

Source: BBC News