Covering an area of eight and a half million square kilometers, Brazil is the fifth largest country in the world and is currently set to rank amongst the highest economic performers. Investment property in Brazil is producing significant profits, as prices remain low but are steadily increasing at an unprecedented rate. Last year growth of 20% per annum was achievable in some prime real estate areas.
Brazil investment growth is focused on some specific locations: The major investment area of Bahia, on the north east coast, boasts stunning beaches and a balmy, tropical climate bringing with it increased development projects and growing numbers of tourists. The city of Sao Paulo is at the brink of a real estate boom while it shakes off its past violent image in favor of a thriving city with much business relocation from foreign companies. Experts also predict that Rio, with its long history of tourism, is also about to see a significant growth spurt in terms of real estate development.
If you are considering purchasing a property in Brazil, a look at our guide to property in Brazil will help you gather information about properties and sought after locations in Brazil, as well as gain knowledge of the property buying process. If your Brazil property purchase is aimed purely as an investment vehicle, it is important that you view our Investment property in Brazil section.
Brazilian Property Market Overview
With prices are at an all-time low in many locations in Brazil, serious investors are recognizing the huge potential for profits on real estate investment in Brazil today. While prices are following a steep growth curve, early investors are seeing excellent returns in the hot-spot areas of Brazil.
Economically, Brazil has seen great improvements over the past three years. In the year of his election in 2003, President Lula decreased inflation to 16% and today inflation stands at only around 5%. This, along with a favorable exchange rate, has encouraged many major international businesses to produce their goods in Brazil at a fraction of former costs. Solid economic performance has prompted a new wave of interest from international buyers wishing to purchase real estate in Brazil, or invest in businesses and the stock markets. Over the past fifteen months the international press has constantly promoted Brazil as a place to visit, do business or live in.
Direct charter flights are now available from the UK to Salvador and Natal for around £180 return, making Brazil a viable holiday destination and a promising buy-to-let investment location.
Brazil Property Investment
Brazilian property value increases of 20% p.a. over the past few years have attracted many a shrewd investor looking for a reliable market in which to invest. These returns directly reflect the exciting growth spurt Brazil is currently undergoing, while high levels of inward investment and a stable economy are encouraging increasing numbers of property purchasers to Brazil.
Brazil is still working on a number of areas that require improvement, including its road system and infrastructure. However, in the light of Brazil’s recent performance and strong economic influences, many investors are now willing to take the plunge and have very real expectations of cashing in on high levels of capital growth over the coming years.
In particular, the north east coast of Brazil is growing in all business sectors while funds are being invested from Brazilian and US banks to allow the area to develop. This location currently offers optimum conditions for those who wish to invest.
As is true of all emerging markets, ‘the early bird catches the worm’ and early investors will see the greatest returns on investment. In an area of such obvious growth and potential, property purchasers are confident they will experience substantial financial gains as the demand for both commercial, tourist and residential property in Brazil increases.
Reasons Why Property in Brazil is a Good Investment
- Year-round sunshine, with average summer temperatures of 21°C.
- Some areas in the north east of Brazil saw property price returns of 20%+ last year.
- Current favorable currency exchange makes it cheap for foreigners to invest.
- President Lula has brought great hope and improvements to Brazil, including a decrease in inflation to an all-time low.
- Foreign investment is actively encouraged and you can own 100% of land and property.
- Property maintenance costs are low compared with the UK/Europe.
- Inflation low at 5.7%.
- Increase of thriving manufacturing industries relocated to Brazil.
- Expected to produce all of its own oil within the next year.
- Great natural beauty with fantastic scenery and 7,000km of beaches.
- According to some economists, Brazil will be amongst the economic leaders of the future, along with Russia, India and China.
- Friendly nature of the Brazilian people. Vibrant cities with carnivals and music.
- Low international risk of war, terrorism or SARS in Brazil.
Homebuyers in Brazil
For homebuyers looking to re-locate or purchase a holiday investment, now is the perfect time to look at Brazilian property. Not only is Brazil a stunningly beautiful country with a sunny climate, it has direct air services to Europe as well as an unprecedented economic growth rate, indicating a very promising future. Not only does Brazil offer a great quality of life, but also a low the cost of living in many areas of Brazil, money goes roughly 80% further than it does ‘back home’.
Property prices are increasing steadily, but homebuyers can still purchase far more property for their money in the current Brazilian market than almost anywhere else in the world.
For the second or holiday home buyer, Brazil offers all the holiday-maker could desire, including some beautiful tropical beaches and vibrant cities. It is entirely possible that owners of property in Brazil will enjoy excellent rental returns should they decide to let their properties during free periods.
Brazil Property Hotspots
Most people searching for property in Brazil concentrate on the north eastern area of Brazil around Bahia and Natal, where properties near to magnificent sandy beaches can be enjoyed, along with tourist facilities and an excellent climate.