There comes a time in every real estate writers life when you have to stop beating about the bush and that time at Amberlamb is now! Yes, it’s true, we believe in Brazil and what’s more, we believe in Brazilian property and here’s why…
For one thing, Standard and Poor’s have upgraded the nation’s credit rating to ‘investment grade’ – really at this point we need say no more…but we will! For another thing the rate at which the population is expanding in Brazil represents increasing demand. The population is also slowly but steadily enjoying an expansion of personal wealth. Then there’s the oil, the housing shortage, the booming tourism industry and the amazing economy…
The legendary US real estate investor and entrepreneur Sam Zell has intimated that Brazil is one of the few markets in the world where there is room for property investment speculation and success in the short term. His comments are backed up by positive economic data emerging from the nation, and by the fact that on the whole, business and foreign direct investment sentiment relating to Brazil is positive.
But rather than just head for the north-eastern coastline and the Natal province in particular and target the strong tourism market, there are more than enough opportunities to be had in Brazil if you align your investment approach with the strong emergence of housing demand in the middle to lower income brackets.
There’s an old saying that goes something like this ‘when America sneezes, Europe catches cold and the rest of the world gets pneumonia.’ There are about a hundred derivatives of this phrase but you get the general idea – i.e., if the number one economy in the world is suffering then the rest of the world suffers more greatly. And in the past it was incredibly true that if there was a downturn in the US economy, then Brazil was one nation that bore a significant brunt.
However, recent economic indicators and financial opinion from leading global think tanks suggest that the Brazilian economy is actually holding its own in spite of a US downturn thanks to economic diversification, and that 2008 will see the nation continue to witness substantial levels of foreign direct investment (FDI). Therefore, in true tabloid headline style, we at Amberlamb see that there are fantastic fiscal fundamentals supporting Brazil’s property sector.
Don’t you just hate it when a market takes off and you haven’t actually bought in yet? It happened in Dubai and it’s happening in Brazil – there has been so much hype, and that hype has been found to be based on actual facts and fantastic fundamentals, that now a frenzied buying crowd is pushing property prices right up before our very eyes.
So, is property in Brazil still affordable for those of us who won’t have a spare million to throw into the pot any time soon? The good news is that it certainly is…and what’s more, if you don’t actually want to be a part of the beautiful people set who are buying all along the beachfront, there are some locations that you can invest in where the future tourism demand will come from those seeking the ‘real’ Brazil rather than a new pair of breasts or perfect teeth.
It’s not often that we have a crisis of confidence or clash of opinion at Amberlamb, but when it comes to Brazil, not all in the office is hunky dory.
As regular readers will know, the general consensus of opinion here has always been that Brazil makes an incredibly interesting prospect for property investors seeking long term, strong potential for growth, yields and above all else profitability...but should we be so positive about property in Brazil?
As we’ve been discussing at Amberlamb now for some weeks, Brazil is becoming more popular by the day and even the popular British press is promoting the highlights of the nation from a property perspective. Basically the word is out about Brazil and the exceptional opportunity that it currently represents in terms of real estate investment potential.
There is massive untapped potential across the nation but it is the northeast of the country that’s getting the most attention because of its improving accessibility, it’s low crime statistics, it’s high desirability as a holiday location and its wealth of real estate for sale – but who buys property in Brazil and why?
Should you or shouldn’t you seriously be considering investing in property in Brazil? This is the one question many real estate investors are asking right now because without putting too fine a point on it, Brazil is quite possibly being billed as the hottest property market prospect currently by every man and his dog.
It’s true - everyone is talking about Brazil and its rapid emergence as the place to be investing, the place to be holidaying, playing golf, buying a second home and just generally exploring – for goodness sake, even the Sunday Mirror newspaper was recently caught extolling the virtues of buying property in Brazil…so just what is it about this particular nation with its rapidly developing property market that has so many people so hot under the collar? Here’s a review of the property investment prospects in Brazil for those of you who need a little reminder.
As our regular and valued readers will know, we at Amberlamb have been hot on the Brazilian property market for quite some time and have been vociferously and widely singing its praises - so in a way it was only a matter of time before the wider world awoke to the property investment potential in Brazil – especially as by now it is pretty undeniable.
Therefore, when we took a look and saw that now even the British newspaper the Sunday Mirror was promoting the virtues of real estate purchases in Brazil we were only a little bit taken aback! It seems that maybe even those seeking a second home overseas for brief holidays will be on the property investment in Brazil bandwagon by the end of the year – so what does this actually mean for the market, will it become oversaturated, oversold and over-promoted?
Question - How astute are the Brazilians?
Answer – oh very!
A recent report by the International Association of Golf Tour Operators revealed some incredibly impressive figures and statistics such as the fact that golf tourists spend at least double that which beach or sightseeing type tourists spend when they go on holiday, and that of the estimated 50 million active golfers in the world, at least a third of this number go on a golf holiday every year.
Can you see where this is headed? Yes, there is significant money to be made from the golfing tourism fraternity which is why the Brazilians have embraced golf, have the likes of Ronaldo promoting golf and now have some impressive opportunities springing up in terms of golf property investment in Brazil! If you want to know where many international investors are setting their sights this Autumn, it’s in the Rio Grande do Norte region of Brazil and more specifically it’s in golf property.
There’s some good news for property investors in Brazil: the very latest statistics from the World Travel and Tourism Council (WTTC) relating to tourism based demand in Latin America with specific focus on Brazil, highlight the fact that Brazil’s commitment to a fiscal and political overhaul, and to the greater promotion of the nation as a desirable and safe place to visit, invest, do business and live is proving more than successful.
And there are no two ways about it, property in Brazil will be boosted by the WTTC statistic which show that travel and tourism demand in Brazil in 2007 is growing at a rate of 7.2% – almost 3% higher than the global average increase – and that for the next decade this increasing intensity of demand will remain exceptionally strong.
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