A Guide to Investment Property Brazil
The Brazilian property market has long been of interest to foreign investors. The cities of and regions immediately surrounding both Rio and São Paulo in the south have been alive with tourists for decades - and now the north is starting to open up as well. As more investment and better infrastructure comes to the areas surrounding Natal in the north eastern region of Rio Grande do Norte, so confidence in the country’s northern real estate markets is growing to match that experienced already in the south.
The Brazilian government is working hard to attract tourists and investors to its balmy South American shores - with direct flights from Europe already offered to the country and the world’s fourth largest airport set to come online in 2010 in San Gonzalvo, interest in Brazil is likely to remain very high indeed.
The reasons why investment property in Brazil is worth an extremely close look include the above mentioned factors plus the fact Brazil has a stable economy, a beautiful climate, a booming tourism industry all of which are factors driving Brazil’s property market currently..
1. Strong Political Leadership in Brazil Promotes Property Investment Confidence
Brazil has a democratically elected government body that is considered very progressive when it comes to economic policies and encouraging foreign direct investment commitment.
From the country’s leadership downwards, Brazil is internationally regarded as a very stable force in South America with a dedication to improving its residents’ quality of life and making itself attractive to investors. The government of Brazil stands out as a driving force behind the attractiveness of this investment marketplace and this gives real estate investors massive confidence in the nation – so much so that global names such as Donald Trump and GE Real Estate have signed up to long term property development and investment commitment in Brazil.
2. Booming Economy Makes Brazil Highly Attractive to Real Estate Investors
Brazil’s economy is considered the 10th largest in the world according to the British Foreign and Commonwealth Office, and using the Real as its currency Brazil’s GDP stood at R$ 2322 billion last year. The annual growth rate in 2006 was 3.72% with an inflation rate of roughly 3.1% making the nation stable economically speaking and considered developing in a sustainable way.
The Brazilian economy is driven by such strong industries as agriculture, mining, wood products, petrochemicals, tourism, electronics and more and its trading partners on the worldwide front include major players such as the UK, America, China, France, Germany, Japan and Argentina. Brazil’s strong and expanding economy and overall globally accepted economic stability are further factors ensuring this market remains very attractive to property investors looking for long term reasons to commit to it.
3. Low Cost of Living is Appealing to Investors, Tourists, Retirees and Expatriates Bringing Property Based Demand to Brazil
Conservative estimates put the Brazilian cost of living at roughly 20% lower than that of the UK which means British expatriates and tourists will see their pounds purchase a great deal more in Brazil than in their motherland.
This is an extremely attractive factor for investors who want to buy in markets where people not only want to visit, but where they can afford to vacation often and where they may be attracted to live and retiree. It basically broadens the base an investor has to work with for rental returns or a profitable and easy exit strategy.
4. Strong Economic Programmes Drive Employment Potential and Improve Local Affordability for Property in Brazil
Although recent statistics from the CIA World Factbook have the Brazilian unemployment rate at roughly 9%, recent decisive and targeted government action programmes are driving these numbers much lower. The government’s push to increase foreign investment and raise tourism numbers is also expected to create more than a million new jobs within Brazil and contribute to a lowering of unemployment statistics.
The emphasis on encouraging investment, increasing tourism and lowering unemployment is creating more confidence for property investors in the Brazilian ability to sustain its economy and what’s more, as the Brazilian people gain employment and affluence so there is a slow but steady increase in demand for property and affordability to attain real estate among the local population. This is a positive development for the long term health of the market and is a good fundamental for an investor to keep in mind.
5. Rapidly Increasing Tourism Industry Directly and Positively Affecting Brazil’s Property Economy
Jet to let property investors hoping to profit in the form of rental income from the tourism trade will find Brazil is a major player for potential investment returns.
As the government’s programmes to promote tourism, improve infrastructure, develop accessibility and attract investment to upgrade facilities and amenities are increasingly successful, estimates are that the country will soon see 65 million tourist arrivals annually. What’s more, tourism is expected to continue to grow by more than 4% a year for at least the next ten years which is good news for investors who want to let properties to tourists.
6. No Restrictions on Foreign Ownership of Property in Brazil
Investors considering Brazil will find the government welcomes foreign buyers.
Land and real estate ownership in Brazil comes with no restrictions for foreign investors and overseas buyers are treated the same as Brazilian citizens with all property sold considered freehold. Add to this other attractive incentives and reasons to invest such as the fact the 15% capital gains tax for non-residents is waived if profits are reinvested in property and there is a 0% purchase tax on short-term investments and the climate in Brazil is clearly ripe for property investors who do not want to see their returns eroded by government authorities and unfair taxation.
7. Brazil’s Landscape is Ideal for Tourism-Driven Property Investments
Other than desert, Brazil’s geography and natural landscape offers almost every kind of sight and terrain imaginable - buyers will find mountains, savannahs, plains, rainforests, rivers, mountains, hills and highlands with the nation well known for its high mountain peaks and breathtaking waterfalls. Quite simply the geography in Brazil lends itself to every form of tourism from golf based to eco tourism - and the 8,000+ km of beaches just add even more potential for an investor targeting specifically tourism for property based returns.
8. As an Exciting and Appealing Nation, Brazil Represents Exceptional Real Estate Based Opportunity for Buyers
People examining the investment property that Brazil has to offer will find that because the nation is legendary for its carnivals, beach life and range of outdoor activities it is also legendary for its property based potential. Where there is tourism appeal there is real estate opportunity. Rio de Janeiro, for example, is known the world over for its annual carnival and lively, tourist-attracting atmosphere – it is also becoming well known as an excellent place to target a considered property investment approach.
9) Increasing Accessibility Makes Brazil Even More Attractive for Property Investors for the Longer Term
Many major airlines and even budget flight operators now offer direct flights from Europe, the UK and the US to Brazil making it a highly accessible location - and when the new international airport comes online in 2010, the ease of travel to Brazil will become even greater.
With flights that last less than eight hours from the European mainland and the UK, getting to Brazil is no more difficult today than making it through a day at work and generally much more enjoyable! As any investor knows, accessibility is a key feature to consider when looking at the long term prospects of a market – fortunately Brazil is ticking all the right boxes in this respect and driving interest and confidence in property based investments.
10. Brazil’s Climate Makes the Nation Even More Broadly Appealing Creating Greater Property Investor Potential
Brazil’s vast geographical expanse gives it five distinct climate regions - this means virtually anyone can find a weather pattern that suits them whether they’re a holiday maker, a retiree or even a business person hoping to grow specific produce in Brazil - and this also means that interestingly enough, the climate in Brazil actually creates choice for investors in real estate depending on the target audience they seek to attract with their investment assets.
In conclusion, the investment property Brazil currently has to offer is becoming more attractive and as the Brazilian government reaches out to foreign investors and tourism figures rise, the nation is becoming a rapidly rising and emerging star for international property investors and expatriates alike.
