Why invest in Brazil? The Early Bird Catches the Worm !

Brazil is a property market early in its growth curve and Natal leads the way. With property growth in the region of 20% year on year – it certainly offers investors a healthy return on investment. Fuelled by great improvement in the economy and President Lula’s progressive policies, Brazil is set to become a major tourist destination and a property investor’s paradise.

Based on a surge in enquiries relating to Brazil, currency specialist HiFX predict in their ‘Annual Global Property Hot Spots’ that Brazil will be an investor’s favourite in 2009 and according to Forbes Magazine ‘Brazil is the most interesting international opportunity for investor’s right now’.

Many of us have seen the growth in property markets and wished we had invested earlier or had bought more properties when prices were low and you could get the perfect property investment balance, of strong growth and strong income returns. Brazil now offers the astute investor the perfect opportunity to enter at the early stages of the market, before prices start to reflect its growing status as one of the world’s most promising economies and tourist destinations.

Positive political and economic outlook

Brazil has experienced strong economical reforms over the last few years. Under the strong leadership of President Lula, interest rates have fallen from 26% in 2003 down to 11.25% today and inflation currently stands at around 4.3% after reaching a high of 2,500% in 1993.

Over recent years major companies in Brazil like Petrobras, Unibanco and InBev have recorded increased profitability, stimulated by a growing middle class community with higher levels of disposable income. Multinational companies such as the mining giant Anglo America are encouraged by the country’s economic potential and are making substantial investment in sectors ranging from manufacturing, tourism and property.

According to the Economist, Brazil’s role as a global energy producer is likely to increase dramatically over the next ten years. The country is already a relatively important oil producer, and following recent announcements of major offshore deep-water discoveries,the largest Latin American country will move from being self-sufficient to becoming a net exporter.

“Some locations have seen capital appreciation of more than 1,000% in 5 years,” says Felipe Cavalcante de Melo Lima, president of the Association for the Development of Tourism and Real Estate in the Brazilian Northeast.

Statistics

• Brazil is one of Goldman Sachs four BRIC economies (Brazil, Russia, India, China) acknowledged as one of the worlds future economic powers, Brazil is now OFFICIALLY the fastest growing emerging market in the world. These countries are set to spend an estimated $21.7 trillion on infrastructure and property.
• Brazil is well positioned to ride out any global downturn with its rich supply of natural resource, strong internal demand and the export sector enjoying extensive trade with Asia.
• Large populations, hungry for growth, stable economies and a political will to make huge changes and attract investment.
• Growing economy (annual GDP growth at a staggering 6%).
• An under priced real estate market with significant government and international investment.
• Excellent historic annual growth.
• Tourism in recent years has increased by over 400%, making Brazil the country with the highest tourist growth rate in the world.
• The worlds 5th largest landmass with 7000 km of stunning beaches.
• Year round tropical climate with 300 days of sunshine a year with an average temperature of 27c.
• Friendly and inviting population.
• Increasing demand for key luxury developments outstrips supply, therefore guaranteeing land price increase of 20 – 30% over the next 4-5 years.
• An emerging middle class that can spend more on its homes, causing a huge housing deficit.
• Strong growing local Brazilian market eager to buy into European style developments.

Brazil is host to the Soccer World Cup in 2014 and is gearing up for the increase in tourism and worldwide exposure. Natal in Brazil’s north east has just been given the honour from football’s ruling body FIFA to become a host city for the 2014 World Cup

Brazil is one of the world fastest growing economies and in part this is due to its expanding tourism and its abundance of natural resources. Its recent discovery of oil and gas reserves now make it the 8th largest oil nation on the planet. This is further underpinned by a forward thinking sovereign state that balances financial prudence with a flair for investment back into the country’s infrastructure.

Brazil’s land prices have been kept low by the limited availability of finance and credit, with only a small percentage of the population holding mortgages hence the mortgage market is in its infancy.

Huge increase in domestic wealth is combined with a proactive government that’s investing in the country’s economic security, tourism and infrastructure.

Key Facts

• New mortgage laws have recently been introduced allowing locals to acquire mortgages. Wide open mortgage packages are expected to be available in 2009.
• Land ownership is far more secure in Brazil than in other Latin American destination.
• The Government is investing heavily in supporting tourism projects by financing major utilities and infrastructure projects including building new airports.
• Outstanding currency appreciation: In 2002 Brazil’s currency was about 4 to 1 to the US dollar; today it is 1:65 to 1 US dollar. The Brazilian reserve reached $101 billion in April 2007.
• Large domestic population of 190 million people, many of whom will embrace credit and mortgages.
• Currently the 10th largest economy but forecast to grow to the 5th largest.
• Some of the best beaches in the world with fantastic tourism potential.
• Emerging real estate market where there currently is a deficit of 8.0 million houses.
• Forecast that in three years real estate loans will rise from 2% to 7% of the GDP -39.5 to 163 billion.

Aspen Woolf have recently launched Petropolis Suites, located in one of the best and most established neighbourhoods of Natal.

It has been classified by the local government as one of the four most exclusive residential neighbourhoods of Natal, and the Development Location neighbourhood of northern Natal with the highest monthly average income.

Surrounded by chic shops, bars and restaurants as well as shopping centres and universities, and within easy reach of both the business district and the beach, including the coastal road leading to Ponta Negra (Natal´s most famous beach), this area has been extremely popular with the local Brazilians since Natal was founded. Because of the high rental demand in this area, we are pleased to offer a 6% per annum rental guarantee for four years.

For more information on Petropolis Suites: www.petropolis-natal.fairdealinvest.com

For information on Brazil Land and Property see:  www.brazil-land-and-property.fairdealinvest.com