As Brazil’s economy has continued to ride high against the developed world, the rising emergence of its ‘elite’ society continues to accompany growth.  Evidence of this has recently been exemplified by a report on the São Paulo property market which indicated that sales valued at over R$ 1 million have hit new records of 25,000+ annual transactions.

Brazil’s ‘IG’ magazine’s report illustrated that the majority of such properties were mainly being bought by businessmen, bankers and politicians.  The properties features include luxurious fixtures / fittings, spacious living areas, excellent views and other first class facilities.

The report also pointed to the increasingly limited availability of land in prime areas of Brazil’s major metropolitan cities.  According to José Eduardo Cazarin Silva of São Paulo’s Axpe Properties: “it is difficult to find large plots in the best areas and they can cost upwards of R$ 10,000 per m², which catapults the price of an area of 3,000m² to R$ 30 million or more.  We recently had owner of an area of 5,000m² in the city's most upscale neighbourhoods – Jardim America – turn down an offer of R$ 60 million.”

Such high values are also attributed to zoning issues established by local city governments.  As an example, in Jardim America construction is only allowed on up to 15 percent of the land (although this is an extreme example with most cases being between 40 to 50 percent).

Asking prices are also elevated by developers and sellers due to the high quality of building materials being used – current construction costs are estimated at between R$ 8,000 – 10,000 compared to between R$  1,500 and R$ 2,000 for properties valued at less than R$ 1 million.  Examples of high quality building techniques include hard wood roofing, thermal insulation, detailed acoustic control, swimming pools, garden features, high quality flooring and other fixtures.

Other luxury regions in Brazil include Leblon in Rio de Janeiro, Lago Paranoá in Brasília, Belvedere in Belo Horizonte, Batel in Curitiba, Jurerê in Florianópolis and Petrópolis in Natal.

Ruben Selvanayagam (Brazilian Property Expert)

www.brazilinvestmentguide.com