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Reasons to Invest in Brazil

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By : Melissa Chappell    99 or more times read
Brazil has long been synonymous with a relaxed lifestyle in idyllic surrounds, living up to the expectations of visitors and investors alike. The attraction of the Brazilian real estate market has developed over the years with incredible strength, proving to be an optimum emerging market option.

Brazilís real estate market and economy continue to strive towards its full potential, offering various distinct advantages. These advantages are continuously proving their capability for assisting the country to reach an exceptional position in the world market.

Reformed Economy and Political Environment

Over recent years Brazil has started to emerge as a potential super power in the worldís economic market. Unlike many other developing nations, Brazil is not solely reliant upon growth in tourism to achieve economic growth. As a nation rich in oil reserves and bio fuels, maximizing the full potential of the countryís economy can produce incredible financial wealth.

Reforms in the government over the past five years have assisted the expansion of the Brazilian economy, enabling the nation to experience a turn-around in several sectors. Wages have increased along with employment opportunities, assisting with the emergence of a middle class society.

Increased disposable incomes and a reduction in interest rates have generated an internal demand for property. Presently positioned as the largest economy in South America, the continued development and expansion could potentially enable Brazil with one of the largest economies in the world.

Strong Rental Yield and Capital Growth Potential

Over the past few years the Brazilian real estate market has been aimed at attracting foreign investors, excellent gains have been obtained. In key areas of interest such as Natal in the north-east, growth of around 20% per annum has not been unusual.

Prices continue to rise as demand increases and development of infrastructure in the region expands to accommodate the influx of buyers. Resort style projects located in idyllic settings, convenient to reach and with a strong appeal towards holiday makers have attracted buy-to-let clients for the rental potential.

Initial development of the region has enabled land prices to be available at their lowest, allowing for the strongest possible growth potential. The convenience of improved flight connections from major cities around the world, connecting with Brazilian tourist hotspots, has helped with the growing interest in the destination for holiday makers. Demand for self catering accommodation is on the increase worldwide, improving the potential gains from short term rental properties.

Exceptional Emerging Market

The attraction of Brazilís real estate market has developed over the relatively short amount of time the market has been open to foreign buyers. Continuous interest in the property market from North American and European investors has assisted in the steady growth of real estate and tourism in the north-east of the country. Although property prices are growing as the market expands, Brazil continues to present exceptionally low priced real estate opportunities.

Returns on investment have been exceptional from the varied ranges of opportunities available. Early entry to the market is providing the best returns with the steady growth and demand, expected to boom further with the opening of the mortgage market to foreign buyers.

Buyers have been entering the market for short, medium and long term opportunities, along with lifestyle purchases and retirement homes. The buy-to-let market has been one of the most sought after sectors of Brazilís investment market, taking advantage of holiday makerís demands for self catering property. Brazil's emerging property market is also set to boom in line with the huge domestic demand, having developed from government reforms to enable continued future growth.

Government Encouragement towards Real Estate and Foreign Investment

For many years interest rates on mortgage in Brazil were at 25%, amongst the highest in the world. The government initiatives to reform the real estate market, creating accessibility to the domestic market and permitting foreign buyers to easily access the sector, has proven to be extremely successful. A dramatic drop in interest rates to around 11%, combined with an expectation for the rates to drop further, has enabled a new confidence in the governmentís active interest in reforming the real estate market for both local and foreign buyers.

New infrastructure throughout the north-east of Brazil has enabled improved accessibility to the area. Expansions of airports, new bridges and highways are being carried out, benefitting all who live in or visit the areas. Considering the few years that Brazil has permitted foreign property investment without restrictions, the sector has developed at an incredible pace.

The government focus on the housing market, infrastructure reforms and tourism has been long overdue. The success of the reforms for economic growth has created immediate and long term benefits to the Brazilian community.

Strong Tourist Growth and Expansion of Infrastructure

It is easy to see the attraction of Brazil as a sought after holiday destination, especially with the continued easing of access to the newly developed holiday resort locations. Natal, located along the north-east Atlantic coast features a year round destination with a tropical climate. Around 8 hours flight from Europe and North America, visitors are likely to spend longer than a few days in the area, creating improved potential to the buy-to-let rental market.

Accessible by direct flights from several major cities such as London, Barcelona and Lisbon amongst others, the new international airport in Natal has been designed to cope with the predicted exceptional growth of the regionís tourist and foreign investment markets.

Price increases in property have been growing directly in line with the demands of the tourist market. This growth has been assisted through government reforms and initiative towards increasing awareness and expansion of the tourist sector. All of the incentives developed for the growth of the tourism sector and attracting foreign investment, have been very successful in creating an exciting and attractive new investment market.

Continued interest, growth and demand of Brazilís real estate market have not slowed, leading development companies to maintain construction to meet the strong demands. The growing internal market provides additional incentives to buyers, allowing for further exit strategies and continued interest in the market.

The stunning natural attractions of the vibrant location are expected to continue drawing visitors from around the world. Following the release of the Goldman Sachs BRIC report, a new fascination in Brazil began to emerge. As confidence in the market has not waned over time, ever increasing numbers of investors are keen to experience the market for themselves.
Property Investing Overseas provide extensive experience dealing with and on behalf of investors throughout the world, offering unbiased information on portfolios and international markets. Our experience within the global property sector enables us a prime position for identifying professional agents and developers, ensuring our clients receive full knowledge prior to entering any property investment purchase with our collaborators. Visit our partner site at Property Investing Brazil.

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