Buying property in Brazil
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Articles on Brazil
Since the acronym was coined in a Goldman Sachs economics report in 2001, the BRIC (Brazil, Russia, China and India) economies have enjoyed the limelight of the developing world, repeatedly predicted to become the most dominant countries in the world by 2050. Even without the luxury of a crystal ball, it is easy to see where the optimism and economic expectations for the largest South American country have arisen from; the International Monetary Fund expects the country to grow by 4.4 per cent and 4.1 per cent in 2007 and 2008 respectively, and the case for investing in property in Brazil is strengthening.
Emerging market real estate specialist The Overseas Property Agency, which offers property for sale in Brazil and property for sale in Cape Verde, reckons there are many good reasons to buy there, not least lowering interest rates and controlled inflation (3.1 per cent in 2006): "It is believed that the steady fiscal reforms and economic stability should allow Brazilian interest rates to drop significantly. Today, Brazil's mortgage lending is almost non-existent, but with the decrease of interest rates, a mortgage lending boom is expected, and consequently an increase in value of its real estate."
International property group Barrasford and Bird Worldwide is just as bullish: "Capital appreciation as a whole is likely to reach 15 to 20 per cent per annum considering the momentum of the market at the moment."
Then again, economic growth is only one factor influencing burgeoning tourism and second-home market, the other is having miles of coastline, temperate weather and a spectacular natural beauty. The government is committed to utilising these assets to attract more tourism as part of its National Tourism Plan, which is looking to attract nine million foreign tourists annually, $8 billion in foreign currency and also to increase the number of domestic travellers to 65 million per year. All this will serve to stimulate the market both for property sales and rental demand, which just leaves the vexing question of where to start your search for a piece of Brazilian paradise. The answer lies in the north-east corner of the country that juts out into the Atlantic Ocean, and enjoys mostly tropical warm temperatures all year round. This region, made up of nine states, is currently leading the charge for international property growth, with a spurt of new developments and some heavy marketing drawing a new generation of property investors.
At the centre of the new Brazilian tourism push, the coastline of the north-east boasts a host of established resorts that already attract Brazilians in holiday mood, alongside greenfield sites that will soon be new-build homes. One of the main tourist hotspots and an already established resort town, Natal is the capital of the Rio Grande do Norte state and is fast becoming the hub of the region because of the international airport at Augusto Severo, while a second international airport is being built nearby: Sao Gonzalo Do Amarante is due to open in 2009 with around five million passenger expected that year.
Radiating out from Natal along the coastline, new developments are being built to satisfy growing demand from both international and local holiday-home market. Twenty minutes north of the city centre, Natal Ocean Club is an eight-hectare tropical garden setting for villas, lodges and condominiums with ocean views over 300 metres of private beach. The club will include spa, tennis club and leisure centre and is due for completion in 2009. Ocean condominiums and villas start from £120,000 through Property Frontiers.
Jacuma Resort is located 25 kilometres north of Natal near the town of Ceara-Mirim, and will include five separate projects of apartments, semi-detached bungalows and detached villas set along the Brazilian coastline. Prices start from €158,700 (£111,500) for a villa and €79,500 (£55,900) for an apartment through The Overseas Property Agency.
A little further north again, Maracajaœ is known as the Caribbean of the Rio Grande do Norte and is famous for its parrachos - coral reefs seven kilometres from the shore that trap the water at low tide into large pools full of marine life.
The Beach Villas development is front-line to the beach and consists of 11 three-bedroom properties with their own decking and swimming pool. Price start from €249,000 (£175,000) through The Overseas Property Agency and require a €3,000 (£2,100) deposit followed by stage payments with the final 30 per cent paid on completion around eight months after reservation. Alternatively, Porto dos Corais is a gated resort that will includes villas and apartments alongside a spa, health club, restaurants, bars and leisure facilities. Apartments start from €45,000 (£31,500) through Property Frontiers.
South of Natal, the town of Pipa attracts a chic Brazilian holiday crowd to its beaches - which consistently feature in the top ten countrywide - as well as its restaurants and vibrant nightlife. Since its discovery in the 1980s by surfers overawed by its beach and sea, Pipa has become a premium destination for local holidaymakers, which adds to the rental opportunities of the area. Experience International is selling two bedroom apartments from £55,126 or three-bedroom villas from £120,525 at Pipa Paradise. The development will include 178 residences and outdoor swimming pools, although the development also overlooks the Praia d'Amor beach if you prefer a natural swim.
Pipa Hills is a smaller development of 52 villas located 600 metres from the beach and 200 metres from the city centre. Each villa has three bedrooms and outdoor decked area for al fresco evenings. The community shares three swimming pools and a bar and barbeque area. Only 13 per cent of the total area has been built on with the remainder given over to green areas. Current rental rates for the villas are around €33 (£23) per day, and a conservative estimate is for a 20 per cent per annum return, which assumes occupancy of 40 per cent, although this is expected to be higher. Prices start from €182,500 (£128,000) for a fully furnished villa through Gem Estates.
The state of Ceara adjoins the Rio Grande do Norte to the north and counts Fortaleza as its capital. The city has long been a tourist drawcard, who come for the 3,000 hours of sunshine a year, temperatures of around 28 degrees Celsius in and out of the water, and vibrant shopping and nightlife. Gem Estates is selling a selection of condominium style apartments from €94,000 (£65,800) at the Catu Residence Yacht and Spa just south of Fortaleza. The development is set around a lagoon and will include spa, shopping mall, leisure centre and beach club, with completion of the entire development due in 2011.
The state of Alagoas on the north-east coast is also a destination of choice for Brazilians looking for a holiday, with the requisite beaches, coral reefs and sympathetic building controls along the coast. The largest city of Macieo has pledged around 800 million real (£215 million) to improve the infrastructure and increase tourism to the area. Barrasford and Bird Worldwide is selling apartments in the 12-storey Anthurium complex starting from £28,000. Located close to the beach, the contemporary Brazilian-designed development will consist of one-bedroom fully furnished apartments with balcony and parking space. Alternatively, the company has resale apartments available at the Leiria development from £27,915. Both developments are in upmarket regions of the city and provide good potential long-term residential rentals.
There are no restrictions on foreign asset ownership in Brazil. Buyers need to get a CPF number, which is like a social security number in order to open a bank account and buy property (this usually only takes a few days). For resale property, the buyer must apply for the Certid‹o de ïnus Reais, which is a certificate of ownership history. Buyers of off-plan property should check all the building licences are in place and the land is properly registered. A small non-refundable deposit is usually made to the seller and once the sales contract is drawn up and signed the property can be registered.
First published in Homes Overseas Magazine November 2007.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advise from a qualified professional.
