INTERNATIONAL
the natal ocean club natal Under £150,000
Characterful, colourful and rather cool
The hot spots are in the north-east of Brazil, which is outgrowing the rest of the country by a factor of two to one.’ richard cash invest in Brazil
Another possible problem facing the
market is rumours that the government will intervene to place restrictions on foreign ownership (currently there are none). However, the motivation for such restrictions is the desire to keep productive agricultural land in domestic ownership. Restrictions are likely to apply only to agricultural land, whereas most buyers have headed for the coastal strip.
Brazilian hotspots Within Brazil, there are a few definite hot spots, with most foreign developers and agents concentrating on the north-east of the country. Property Frontiers has been promoting Natal, which David Cox describes as “a city on the sea with growth coming from many directions.” It has a high growth tourism industry, together with economic growth and increasing demand for property. At the bottom end of the market,
affordable housing aimed at the local market can give investors a good entry point; Property Frontiers promotes 2-3 bedroom apartments in Edificio Dr Geraldo Furtado from £57,000. The Natal Ocean Club, by contrast, is aimed at the holiday market, but is still under £150,000. Richard Cash agrees that “the hot spots
are in the northeast of Brazil, which is outgrowing the rest of the country by a factor of two to one.” However, he believes
that Natal is not necessarily the best choice, pointing instead at Paraiba. This state, he says, has similar fundamentals, but prices there are up to 40 per cent lower. “It’s a Brazilian secret,” he says, “many Brazilians are buying in Paraiba.” Rio, on the other hand, may be a thriving
city, but it offers relatively little to the property investor according to Cash. “It’s still a great market,” he says, “but nowadays it’s not far off London prices.” Sao Paulo, too, is a relatively mature property market,
and while it will benefit from the economic growth of the country, it may not see major increases in valuations.
opportunity knocks! UK estate agents with international divisions should certainly consider Brazil as a possible new market. Richard Cash says, “It is a great market for international agents, some sell ten properties a week.” He mentions that Invest in Brazil’s now has one of the first SIPP approved real estate investment vehicles for Brazil, which should attract the pure investment client. However, “There are a lot of people doing it wrong in Brazil.” Agents need to do their research properly and ensure they partner with the right developers. Some developments, he says, are now being targeted to the international market, and often won’t sell well to Brazilians, who are quite demanding in what they want from a resort, including sports facilities and a high standard of comfort. The law also demands that properties are fully licensed and under construction before they can be sold to locals. “Buy where there are Brazilians buying,” he advises. Besides, the difficulties of currency
£57,000 Upwards edificio dr geraldo furtado natal
transfer and finance mean agents need to be up to speed with these issues before they get involved with the market. Compared to the financial sector, where
Brazil has for some time been a favoured emerging markets investment, the real estate sector is playing catch-up, relatively few UK agents currently specialise in this market. But the news is getting through, and if they’re not dancing a samba yet, it’s only a matter of time!
Add your own tips and techniques online at:
www.propertydrum.com/articles/brazil
PROPERTYdrum OCTOBER 2010 31
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