Why Invest In Property in Brazil?

Capital growth

  • Brazil is classed as a new emerging property market, which puts potential growth figures at their highest at present. Over the past five years, Brazil has seen property prices increase by approx 20% pa in 2006, in some areas of north east Brazil, returns of 20%+ were not uncommon.
  • Brazil is one of the four largest developing economies in the world ( the three others being China, India and Russia) and according to Goldman Sachs, by 2050 Brazil will be the worlds 5th biggest economy.
  • There is no restriction on foreigners purchasing property in Brazil and ownership is 100% freehold.
  • Now is the time to consider a property investment in Brazil. Property prices are low and look set to rise as the Brazilian property market and supporting infrastructure continue to mature at a very steady pace. Property experts are predicting this is the market for investment now before prices shoot up in the coming years as the economy grows.
  • The cost of living in Brazil is much lower than in most European destinations and currently stands at 20% of that in the UK. As a result, the cost of maintaining and managing your property is very low and it is small wonder that Brazil is also increasingly popular as an expatriate retirement haven.
  • The property market in Brazil currently sits on the brink of a boom period while investment growth is inevitable in Brazil, especially in locations by the sea and in north east Brazil.
  • Many areas are being transformed into top class resorts with supporting infrastructures to boost the tourist industry. Brazil's tourism success is creating a huge demand for accommodation and shrewd property investors are acting early, purchasing bargain properties with a view to generating good rental yields. Meanwhile the market is gaining momentum and property prices are steadily pushing upwards.
  • Currency exchange rates are very favourable in Brazil today, making property investment a viable and attractive option to foreign investors who avoid losing vast amounts of money in their exchange transactions against the Brazilian Real. Brazilian currency has recently stabilised and become far more competitive with other international currencies such as the US dollar. This has of course increased purchasing power for overseas investors in Brazil. The competitiveness of currency exchange also means that international businesses from the US and UK are establishing themselves in Brazil and are able to operate with far lower overheads, therefore creating increased productivity and profits.
  • In the year of his election in 2003, President Lula decreased inflation to 16% while today inflation stands at an all-time low of around 5.7%, firmly indicating a safe and secure economy in which to invest.
  • Brazil's economic expansion and low inflation levels could well result in central bankers in Brazil dramatically cutting their lending rates. This, in turn, would result in much local property market activity, with a reduced cost of borrowing making loans affordable for Brazilian citizens. The increase in profitability of certain major Brazilian companies (eg. Unibanco, Brazil's private sector bank and Eletropaulo, power distributors) as well as the successful expansion of international companies in Brazil (eg. Arclor and InBev, the world's largest beer producer) further boost the economic prospects of the country, bringing with them a positive effect on real estate investments. Furthermore, Spanish and Portuguese developers as well as major hotel and resort groups have now arrived in Brazil and are currently investing millions of euros on tourist developments aimed at the European market.
  • According to experts, Brazil is expected to be self-sufficient in oil reserves within the next year and it is believed by some economists to be amongst the worldwide leaders of the future, along with Russia, India and China. As Brazil still suffers a severe lack of housing, investors looking for development opportunities should consider property construction projects in Brazil. Exciting opportunities are now on offer for investment within this rapidly developing property market. Brazil is worls 15th richest economy
  • GDP growth rates of approx 4%
  • The economic situation in Brazil presents itself as the most favourable in historical terms to undertake long term investments, especially with regard to property investments.
  • New airport coming in June 2010: due to booming tourism and enormous potential for future growth the government has decided to build a new airport in Natal which will be the biggest airport in South America and the 8th largest in the World. It will be designed to cater for the new airbus A-380.
  • Brazilians love their country and usually spend their holidays in the North East part of the Country.
  • The North East part of Brazil is the new emerging location where all the tourism infrastructure is going including the new airport. With a population of over 180 million of which 1.7 million visited Natal area alone in 2006, there is plenty of scope for growth as well as international tourism which should also grow in the coming years. With over one million multi millionaires in Brazil there is a ready market for European style up market holiday homes. Coupled with that Brazilians take holidays in Brazil and they will drive the growth in holiday homes along the coast.
  • Compared with other international tourist destinations Brazil benefits from a complete lack of natural disasters like hurricanes, tropical storms, tsunamis nor is it affected by earthquakes.
  • The North East part of Brazil is only 6 hours from Florida and in the coming years it is expected that many flights will arrive there from the US.
  • When compared to the established property markets there is huge potential for growth in property prices, timing is all important when deciding to invest in this market.
  • What makes North East Brazil a good investment location for investment is the increasing tourism, the increase in investment in the infrastructure and the wonderful all year round sunny climate and amazing beaches.
  • Tourism grew by 43% between 2002 and 2005 as a direct result of the National Tourism Plan developed in 2003. Tourism promotion is a top priority in the Miinistry of Tourism.
  • 96% of tourists visiting Brazil say they definitely intend to return and this is a strong indicator of a growing tourism market.
  • Brazil is a peaceful country and is not affected by political wars or terrorism