Why invest in Brazil?
The "Real" Plan
Brazil is one of the world’s best locations for investors seeking to capitalise on its booming economy, land and primary housing market. Compared to other destinations, Brazil is still relatively untapped in terms of real estate potential and yet it offers a potent combination of South America’s fastest growing economy, a stable democratic government, an increasingly affluent young population and a huge shortage of quality housing stock.
- Brazil has the largest economy within South America
- It is predicted to become one of the four most dominant world economies
- Foreign direct investment of around US$40 billion in 2010 has enlarged industrial capacity and boosted competitiveness
- The economy will benefit strongly from hosting two of the world’s largest sporting events – the 2014 World Cup and the 2016 Olympic Games
- There is a housing supply deficit of over 8,000,000 primary and secondary homes which is globally unique to Brazil, making an exit strategy extremely powerful and secure
- Foreign investors can own freehold land and property with full title deeds
Brazil is one of fastest growing major economies in the world and has quickly moved from being ranked the tenth largest by GDP in the world to seventh by purchasing power and eighth by nominal GDP. The economy has grown in 2010 by some 7.5% with a GDP of 3.675 trillion Reais.
It is clearly the number one investment player amongst the Latin American nations and taking Brazil’s purchasing power into consideration it has now overtaken Britain and France and is set to break into one of the world’s big five countries.
Source: The Economist - March 2011
Brazil’s government announced R$958.9 Billion programme of investments in infrastructure for 2011 to 2014.
Source: Financial Times - March 2010
- Under strong presidential leadership, interest rates have fallen dramatically from 26% in 2003
- Generally the economy is forecast to grow between 4.5-6% in the coming years
- The inflation rate in Brazil was reported at 6.3% in March of 2011 from 1980 until 2010, the average inflation rate in Brazil was 445.98% reaching an historical high of 6821.31% in April of 1990
- Foreign direct investment (FDI) is also growing substantially; from US$25 Billion in 2009 to US$40 Billion in 2010
- Brazil has been among the world's leading recipients of FDI in recent years; a strong predictor of the returns that are possible
- According to ADIT Northeast (Association for Real Estate and Tourism in the North East), Rio Grande do Norte, Bahia and Ceara have the highest volume of new investment in the region
Prime investment attractions
The Expanding Middle Class
- Youthful, growing and buoyant middle class driven by rising employment levels and rising wages
- Monthly income between two and five times the official minimum wage
- Fast rising prosperity levels; in a short period 50% of the population has risen to level C (middle class)
- Middle class now around 95 million people and an increasing desire to own their own real estate
- An increasingly affluent and growing middle class expected to purchase between 1,000,000 and 1,200,000 land and housing units per year
- Serviced land plots are seen as a flexible acquisition of real estate
Housing supply deficit
- It is estimated that there is a housing supply deficit of over 8,000,000 primary and secondary homes
- This shortage is unique globally making the exit strategy extremely powerful
- Increasing availability of mortgage finance products contributing to a boom in the real estate sector
- Lending by the Caixa bank for mortgages in Brazil in 2010 rose by 53.6%
- Brazilian state bank BNDES lent a record 168.4 Billion Real in 2010, 23% more than the previous record in 2009
Source: MercroPress - February 2011
- No region has seen faster growth than the North East coastline of Rio Grande do Norte
- Wage levels are particularly high in regions such as Natal, influencing growth in the condominium property market
World Cup and Olympics
- 2014 World Cup (Natal is an host city) & the 2016 Olympics will be hosted by Brazil
- Enormous media coverage and massively expanding tourist potential
- Tourism is expected to show exponential growth with a vast amount of visitors for the World Cup alone
- Brazil has excellent transport links from north America and Europe
- Brazilian Government is investing heavily in supporting tourism projects by financing major utilities and infrastructure projects
- Foreign tourist expenditure in Brazil during 2010 was US$5.92 Billion, the highest ever total, and an increase of more than 11% in comparison with 2009 (Source: Central Bank)
The North East of Brazil is experiencing capital growth of around 20% per annum and Rio Grande do Norte, our chosen investment area, is the state in the region that attracts the most investors. A combination of beautiful coastline, year-round sunshine and the government’s investment of over US $1.1 billion in the region’s projects, transport and infrastructure, makes it the most sought-after investment area. There is a new airport under construction which will be the largest in Latin America.
Economic market indicators point towards excellent returns and high capital appreciation on land and property investment in Rio Grande Do Norte. Its economy is growing faster than the rest of Brazil and it is set to become the greatest “hot spot” in the world for homes and tourism related property. There are no visa requirements for most Europeans for visits of up to six months.
Land in some areas has already increased by as much as 700% in value and whilst still relatively cheap, demand is expected to outstrip supply driving up prices and values.
Natal is the capital city of Rio Grande do Norte and is only seven hours flying time from most of Europe. Reassuringly, its pleasant, sunny climate is outside the extreme weather corridors and it escapes the violent hurricanes that threaten the Caribbean and Florida.
Natal has been chosen as one of the host cities for the 2014 Fifa World Cup and will therefore attract significant investment and media attention, always an exceptional stimulus for property prices.
Just 20 minutes from the new international airport, Palm Springs Natal is set in one of Brazil’s most prized and protected areas, offering a tropical ecosystem and natural paradise that is attracting growing numbers of affluent Brazilians with considerable disposable income in search for land and property. The area boasts world class sporting and leisure facilities and the Palm Springs development of 453 fully serviced land plots set in 100 acres, will take full advantage of the natural and man-made attractions, making it one of the most exceptional real estate investment opportunities in Brazil.
Natal - host city of the 2014 World Cup
- Natal has been chosen as one of the host cities for the 2014 FIFA World Cup
- Abundant media is expected
- Top sporting events are proven income generators as well as the engines behind much investment land and property
- Exceptional stimulus for real estate prices
- A new airport, Sao Goncalo do Amarante is under construction in Rio Grande do Norte
- Largest airport in Latin America and the seventh largest in the world
- Dramatic rise in tourist numbers to the region expected
- Airport will have capacity for 40 million passengers
- Scheduled for completion in 2013
- Plans are approved to construct a marina that will take an area of 50 hectares.
- Capacity of 500 boats
- Will also include a park a museum and other modern facilities
- Marina will be built around the Iate Clube de Natal, about 500 metres into the Potengi River and about 500 metres from the Fort of Wise Kings.
- Gateway to visitors from all over Brazil
Key factors driving real estate investment in Natal
- Natal has a premier position as one of Brazil’s high end tourist destinations
- 8,000,000 million housing shortage
- The number of tourists to the region will soar with the World Cup in 2014 and the Olympics in 2016 will draw much added media attention
- A huge amount of investment on infrastructure is going towards public services, hotels and stadiums
- Massive new international airport is expected to strongly increase visitor rates to the region
- Cheap labour costs and inexpensive building materials support rapid capital appreciation
- Accelerating mortgage facilities
- Growing middle class with considerable disposable income
- Development consists of 453, fully serviced land plots on a 100 acre condominium, and is positioned just 180 metres from the beach
- Muriu is already an established area for Brazilians with primary and secondary homes
- The area is underdeveloped and accommodation to rent is scarce propelling interest for secondary/holiday home
- When the 40 million passenger airport opens (20 minutes from Palm Springs) there will be a flood of potential clients looking to purchase or rent accommodation in Muriu
- Demand and increase in value will be driven by planned 5 star resorts nearby with allocation at premium prices, access to these resorts is by passing Palm Springs along the RN160 and even with substantial increases in price, Palm Springs will provide an extremely competitive alternative
- A density of only 40% ensures that much of the beautiful natural surroundings will be retained
- Wonderful views of the sand dunes covered in the protected Mata Atlantica natural flora, the natural spring that runs through the development or the ocean will be enjoyed by many of the plots
- Leisure facilities to include swimming pools, tennis courts, football pitches, shops, restaurants and gymnasiums, available to all owners within the plot purchase price
- Established sales to the local market
Palm Springs offers investors an unrivalled opportunity to capitalise from the increasing value of land on one of Brazil's most desirable plot and build developments.
Palm Springs, now at an early stage of its development cycle will benefit from increasing land prices and market demand has infrastructure progresses.
The completed infrastructure will further accelerate the land value as the plots have further appeal to end users who wish to immediately construct their own villas. Already Palm Springs has attracted sales from the affluent local Brazilian market.