Year-round sunshine and fabulous beaches mean that Brazil has long been considered a great holiday destination, but is it also a good place to buy property? Brazil’s economy has enjoyed steady growth over the past few years, helped by the commodity boom.
Property in Brazil: Sao Paulo apartments
The flourishing economy means that São Paulo, the country’s business centre, is now being touted as a ‘property hot spot’. São Paulo “hosts much of Brazil’s industry and is home to many of its best artists, scientists and musicians. It is the financial capital of the southern hemisphere, with arguably the best nightlife,” says The Daily Telegraph’s Andrew Downie. And as the country continues to nudge its way onto the business world stage, São Paulo is expected to attract more and more foreign attention.
At present, a three-bedroom apartment can sell for between £105,000 and £185,000 in the city’s Pinheiros district – but there are clouds on the horizon. Supply is starting to outstrip demand and yet “the construction companies just don’t stop building”, says Valentina Caran, the owner of one of the city’s biggest property agencies. This suggests the market may become saturated in the not too distant future. On top of this, “violence and organised crime remain major concerns”, warns Downie.
Property in Brazil: look to the Coconut Coast
So with São Paulo looking risky, what else does Brazil have to offer? The white sands of the Coconut Coast in Bahia to the north of Salvador are attracting more and more foreign investors looking for a cheap alternative to the Caribbean. Although property prices in the area are rising by more than 20% a year, beachfront villas are still available for £45,000 and flats for as little as £24,000.
Many European developers are working in the area “in the belief that there’s the same potential as Spain and Portugal 30 years ago”, says The Guardian. The area certainly bears the hallmarks of an up-and-coming property market; a new international airport is due to open in 2009 in Natal, to the north of the area, which will hopefully bring direct flights to the UK with it, and Brazil has made its first appearance on Currencies Direct’s Global Emerging Markets Index, which monitors the number of foreign exchange transfers undertaken in emerging markets every month. The index is a good indicator of an emerging property boom, as most transfers handled by Currencies Direct are made by British citizens purchasing property.
Property in Brazil: what to watch out for
The idea of white sandy beaches and 300 days of sunshine a year is, of course, very appealing – but be careful if you plan to take the plunge. Unsurprisingly, as with most emerging markets, buying property in Brazil
still comes with some headaches, so make sure you employ a good local lawyer to guide you, as “the legal wrangles are too complex and the bureaucracy too stifling to manage without one”, says Downie. Head to the Brazilian embassy’s page at Britishembassy.gov.uk for a list of recommended lawyers. Things to watch out for include unscrupulous owners selling property that is about to be repossessed; remember to check for soundproofing, as Brazil makes London look peaceful; and check the service charges – in old buildings these can be very high, almost as much as the potential rental value.
For information about Brazilian property, see Beachfront Brazil (www.beachfrontbrazil.net, 020-7193 1472); Planta Imoval (www.planetai movel.com); Colliers CRE (www.colloers.com, 020-7487 1978).