Brazil enjoys a nice, stable political environment and an very healthy economy built largely upon FDI – foreign investment – into residential property and the oil industry (Brazil has HUGE oil reserves), It would appear that’s Brazil is bucking trend of the global economic downturn that is devastating many property markets around the world and emerging as an investors’ safe haven. In fact, Morgan Stanley’s Emerging Market Index named Brazil “the world’s most significant emerging market” recently. It appears that Beleaguered financial markets the world over are looking at Brazil’s economy with admiration and envy.
“The Banco Central Do Brasil is currently quoting quarterly GDP growth of 3.11% – and I think that is a stunning figure bearing in mind the world economy at present. Last year Brazil’s economy grew by 5.11%, a truly emerging economy in every sense of the word.
Brazil appears resilient to the turbulence in the northern America and the rest of the world. And, while Spanish property is dying a protracted, painful death Brazilian property is on the move, upwards.
Brazil property is still very much in its infanc. Prices are still well below the £80k mark in most areas and are widely expected to experience 10% to 20% in capital growth over the next few years as current demand way outstrips supply, both internally and from abroad.
Brazil has been allocated investment grade status by most of the major credit agencies and due to economic improvements over the past three years, it is now widely viewed as a viable property investment option. Those property investors who got in early are currently enjoying excellent returns in Brazil’s hot-spot locations.
Overseas property investors’ attention is now firmly focused on the benefits of investing in property in Brazil while the international media is consistently pushing Brazil as an encouraging market for investment in general.
The population growth rate of 0.584% mean nearly eight million new homes are needed to cater for the country’s growing population, but while its cities like Sao Paulo and Rio de Janeiro may be home to the largest number of its residents, it is the north-east region that is seeing a surge in investment property. Mostly from the emerging middle class of Brazil looking for a second home in a beautiful location, but also largely from foreign property investors hoping to cash in on the growth potential.
My money is on the area in and around Fortaleza, Flexeiras shows amazing promise as one of the most beautiful parts of the world. It’s also where most Brazilians go on holiday and occupancy rates for short term accommodation is a stratlinbg 80% due to the lack of supply and huge local demand.