Investing in Brazil

An economic giant taking a leading role in the worldwide property market

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Property Secrets have received many questions about the Brazilian property market.

Is the market growing?
Will there be significant property price growth?
Is there a mortgage market?
Is it competitive?
Is it worth investing there?
What problems will I face?

And many, many more...

Such was the demand for information from you that we enlisted Daniel Talavera, our expert on Brazil and based in our Spanish office, to analyse the market and report back with his findings.

The result and the latest addition to our range is the Brazil Property Market Profile, an in-depth breakdown of all the factors affecting the Brazilian property market today and your invaluable guide to decision making.

If you're considering investing in Brazil or are just interested in the market then this Property Market Profile is the ideal resource.

What's inside?

The Brazil Property Market Profile provides you with comprehensive analysis and explanation, covering a wide range of related subjects, including:

• The recent history of the country
• The pillars of the Brazilian property market
• The profile of the country and economic projections
• Foreign Direct Investment and its impact
• GDP analysis
• Key industries
• Inflation, Interest Rates & Currency
• Geography & Infrastructure
• The real estate market
• Tourism
• Individual markets - Sao Paulo, Rio de Janeiro, Brasilia
• Mortgages & Finance
• Legal requirements and restrictions

Basically, EVERYTHING you need to know to make a fully informed investment decision on Brazil.

Why should I consider Brazil?

From the Executive Summary:

"Brazil is a novel and distant market for the European investor which has grown with the improvement in macro-economic terms and with the reinforcement of the main motors of its real estate market: tourism and population concentration in the big cities."

"...we understand that if we balance the positive and negative aspects of the Brazilian market and project them in the short/medium term, real estate investors in search of emergent markets outside Europe can congratulate themselves on having found a very viable alternative."

POSITIVE ASPECTS OF THE BRAZILIAN MARKET

• Brazil has become an economic power that does not depend exclusively on natural resources since it has developed other industries such as technology and cars
• The present economic conjuncture benefits the trade balance exporting bio-fuel at a price that helps to pay the foreign debt
• The internal demand for properties and the consolidation of the middle-class as the basis for demand
• Increased supply of properties for the middle-class at reasonable prices
• Increased supply of and demand for financial products: Since December 2002 the volume of banking credit has increased by 300%. In the last twelve months alone it has grown by 103%
• Low inflation has not diminished the capacity for consumption
• The low cost of properties
• The real estate market in the cities is solid and that in the coastal cities offers high returns

ASPECTS TO CONSIDER WHEN INVESTING

• Think through the pros and cons well before making any decision. There are many successful European investors in Brazil, but many others have failed through not following guidelines
• Place yourself in the hands of an efficient and reputable Brazilian legal firm
• We recommend investing to sell since the laws that regulate the rent market are excessively favourable to renters
• Look for the local demand in cities or tourist zones near the cities where local demand for secondary residences exists
• The office market is centred on São Paulo and Rio de Janeiro

Of course, there are some negatives that MUST be weighed up. The Brazilian Property Market Profile does not ignore them:

NEGATIVE ASPECTS OF THE BRAZILIAN MARKET

• The administrative system is highly bureaucratised
• Foreigners cannot obtain mortgages from Brazilian organizations. To do so they need a residence visa
• Deficient infrastructures do not help economic development
• The net debt of the public sector continues to be high: 41.4% of GDP
• High interest rates
• The tourist real estate market is the main showcase and is speculative for foreigners
• Although the government is incorporating measures to increase the purchasing power of the citizens, wage levels continue to be low

Where in Brazil should I look - and where should I avoid?

The Brazilian Property Market Profile covers both questions. In-depth research into the key cities in the country, alongside analysis of the tourism market, reveals the best locations to consider and the areas that are suffering or will suffer from oversupply.

The Profile is packed with graphical illustrations of the analysis used, giving you a clear understanding of how conclusions are reached. All resources and references used are also given.

The big market of São Paulo

"São Paulo is the nerve centre of Brazil's economy and industry and the city that is experiencing the most significant growth. Although Brasilia is the official capital, São Paulo is the economic motor."

"The region of the southwest where São Paulo is located occupies only 10.9% of the territory of Brazil but it represents 39% of the population of the country with a total of 63 million inhabitants."

"With this percentage it is clear that the local real estate market of Brazil is at its maximum in the region of Sao Paulo and in particular its capital, Sao Paulo, with a registered population of 10,886,518 in 2007."

"In 2001, the registered population was 10,435,546 inhabitants, so in six years the city has added 450,972 registered inhabitants. The number speaks for itself. According to the Fundación Seade (Sistema Estadual de Análisis de Dados), 30% of the city's population are concentrated in the districts of Marsilac, Parelheiros and Grajau."

"The census figures for 2001 show that there were 2,984,416 permanent private households, whereas 3,131,389 families were resident in private households, whether permanent or temporary. Therefore, according to the census data for 2001 a permanent market of supply and demand of 146,973 units existed."

"The estimated growth of capital in Sao Paulo is between 20% and 25%"

This is THE information you need to ensure you make the right decisions, avoid costly mistakes and maximise your investment potential.

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