Brazil, a booming property market?
Claims of 30% gains on land within 3 months, people buying online without viewing their investments and suggestions that people are ramping their investments on the thread – this group of posts has it all!
This thread was originally started back in February this year with a suggestion that land investments in Brazil were doing very well and the original poster had seen growth of 30% on a land investment in just 3 months. This claim has prompted an array of comments from ‘Well done’ to ‘We do not believe it’ and everything in between, but it has opened up a number of interesting debates.
One of the more bizarre claims is that people are buying Brazilian property online without even viewing the assets in question, a claim which has rung alarm bells with many on the thread. However, there are a number of posters who suggest there is nothing wrong with this if you are able to find a trustworthy agent on the ground. The opinion from those who claim to have hands on experience of the Brazilian property market vary widely with some claiming that the market is very buoyant and others suggesting that the price rises posted on the thread are a little out of synch with the market as a whole.
Interestingly towards the end of the thread a number of posters have suggested that while Brazilian property has done very well of late, there are risks to any emerging market. Past performance of the property market does not mean it will continue forever.
Summary
While there is no doubt that the economic environment and investment potential for Brazil has increased dramatically over the last decade, this is still an emerging economy which investors should be treating with care. Historically the country has been heavily dependent on the US for economic prosperity and while the balance has changed of late (with more overseas investment than ever before) the country is still very closely linked to the US economy.
As is now common knowledge, the US economy is in a state of turmoil with credit lines disappearing fast and some of the country’s oldest companies in serious financial trouble. The government has to endure expensive bailouts for troubled banks and possibly Fannie Mae and Freddie Mac – something which is sure to impact upon the short to medium term performance of the US economy. As the US economy stalls this is sure to have a knock on affect to countries in the region and while the impact may not be as large as in the past, this is sure to knock the property market in Brazil.
One alarming point from this thread is the suggestion that some investors are buying assets in the country without visiting the area. This has the feel of a property bubble, one in which every investor thinks it is easy to make money, one which is probably waiting to burst!
Medium to longer term Brazil is set for sustained economic growth but the short term picture is a little less clear. Be wary of being sucked into the final stages of a property bubble without knowing what you are actually buying.
Funnily enough, a couple of days ago, during a Bovespa event in Sao Paulo, President Lula and the Minister of Finance, Guido Mantega had some quite appropriate comments for this blog:
"Antigamente, quando tinha um resfriado nos EUA, nós pegávamos uma pneumonia. Hoje, quando os EUA pega uma pneumonia, pegamos apenas um resfriado."
"Previously, when the US catches a cold, we'd catch pneumonia. Today when the US catches pneumonia, we catch a cold"
Hi. I guess Brazil is still and will be a booming property market, here in Ceará things still look quite good. However, the internacional chrisis will affect every property market for one or two years and prices should not advance too much. Seems like a good time to search for opportunities, that's what I'm doing
We sell investment property in Brazil to the UK and European market and we have not seen a decrease in the price of properties but maybe the number of people buying has slowed down a bit. In fact some of the properties we have been marketing (off plan investment) have actually undergone a price increase. Plus we are also receiving a good number of enquiries from people interested in investing in Brazil properties everyday so in our opinion Brazil is still a stable and attractive market to consider investing in…..
What happened?
Some months ago everybody was talking about the Brazilian market. Buy now 30%, 40% 100% per year R.O.I. Where are these developers now? I have been to Natal last week to check out some projects. It’s chocking , almost all the foreign developers are gone, and projects stopped, clients with half finished properties. I only found 2 good projects, 1 close to Natal and another in a very beautiful city called São Miguel do Gostoso, both project from foreign investors. What has happened?
I own a real estate company in Sao Paulo. We have sold a lot of property to foreign clients. Some 9 months ago the market changed, the foreigners stopped buying. 90% of the world is in crisis. Brazil has had its share to. But Brazil is recovering very fast. Brazilian economy is relatively stable, the Real is strong, economy will grow and inflation is under control. So why not invest in Brazil?
The Brazilian central bank is slowly lowering the interest rates for mortgages! From 12% slowly down to just under 10%, we think this is just the beginning. What will happen is that property prices will rise. The Brazilian internal market are our clients now. They must be the marketing and sales focus of all these developers that stopped their projects. This market is enormous. We have shifted our marketing approach to Brazilian buyers. Now the Brazilians are buying houses and apartments in the North East of Brazil, for very good prices!
Don’t believe all these 50% or 100% price increases. Just use your common sense. Brazilian real estate is a good investment, check all documents, contract a good lawyer and use your common sense. Prices are rising, you will make some good money on your investment and you will have a great place to spend your holidays.
Brazil is a great place to live!
I am a sorry investor in the Jacuma Beach project that seems to have folded.
Who is the reputable developer close to Natal mentioned by Century 21?
If countless developments go to the wall, then where does that leave the market with such bad press?
BAREFOOT BELIZE / BAREFOOT INVESTMENTS I would appreciate any information you could give which might lead investors to recover their 'investment'. It now appears that the principals involved have moved on and are trying to attract more investors to a similar 'Investment' in The Cacao Pearl, Palawan. Having had virtually no contact with the principals apart from a few emails it does seem that they have given up on Belize and our trying their 'luck' elsewhere. Given that they have offered no reasonable explanation as to the where abouts of investors funds it does seem 'strange' that they are looking for further investment funds for a similar project, could it be they will have neglected to tell the new investors of their past record.
The smiling sun tanned faces of the principals on their The Cacao Pearl, Palawan brochure does not go down to well.
I know this may sound blase, but despite the ongoing problems in America and Europe, we haven't noticed anything like the downturn in proeprty sales many of us were predicting two years ago.
In my opinion investors will always be just that, investors, and it's their job to seek out the best markets to spend their own, or their investors' cash.
For that reason north east Brazil still seems to offer by far the best value and some of the largest returns…
I have brought a condo in Taiba,Fortaleza,just curious what the prospects of this area can and will become,roads were not very good,lots of space for other developers to build.