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Tuesday, 18 November 2008 00:00 |
Low property prices and an economy with the long-term potential to become one of the strongest in the world make Brazil an exciting and exotic prospect for property investors.
The South American giant is rapidly establishing itself as a developed market but still provides many of the benefits that are usually confined to riskier, emerging countries. Its immense natural beauty is also reeling in ever greater numbers of tourists from around the globe.
A future powerhouse
Now is the perfect time to get involved in the Brazilian property market. It was recently identified by Goldman Sachs as one of four countries - along with Russia, India and China - that have made great political and economic strides and are establishing themselves as the new dominant economic powers.
Despite the fiscal stranglehold that is choking many countries in Latin America and the rest of the world, Brazil enjoyed substantial economic growth of 6.1 per cent in the second quarter of 2008.
In fact the country is now the world's leading producer for a number of agricultural products such as sugar, beef, chicken and orange juice, and has also seen great increases in its industrial output.
Led by president Luiz Inacio Lula da Silva, the current regime has also introduced much-needed stability into the country.
Interest rates were reduced from 26.5 per cent in 2003 to a much more manageable 15.75 per cent and, along with a developing mortgage market and a lack of restrictions on foreign ownership, have helped to encourage interest from property buyers.
Booming tourism
The benefits provided by such healthy economic growth have been compounded by an influx in international visitors over recent years. The president claimed recently that Brazil will become a "key tourism destination" in the next ten to 15 years.
Indeed, with the World Travel & Tourism Council estimating that the industry will see 5.8 per cent growth in 2008 and an average rise of 4.9 per cent per annum over the coming ten years, it's easy to see why. In 2007, over five million holidaymakers visited the country.
Recently, a spokesperson for Brazilian tourism agency Embratur revealed that the government is stepping up its efforts to promote the sheer variety in attractions that the country offers.
"Brazil is a hugely diverse land. We have beach resorts, but we also have much more including fascinating fossils in Dinosaur valley, world heritage cities like Ouro Preto and Olinsa and many outdoor pursuits such as caving, canyoning, fishing and bird watching," he added.
Low-cost property
With all this going for Brazil, it should be no surprise that most experts expect the property market to grow substantially over the next five to ten years.
Millions of homes are currently being built across the country and prices are currently much lower than in Europe, with properties in some regions such as the north-east expected to enjoy capital appreciation of up to 20 per cent.
No country is completely isolated from the credit crunch, which has caused a drop in the value of the Brazilian real. But this temporary fall makes it the ideal time for British property buyers to invest.
According to Deane Roe, account manager of foreign exchange specialist Moneycorp, those investing in a Brazilian property over the next few months will have saved up to £10,000 compared to the beginning of September because of the changing value of the currency.
Peter Treherne, of investment property consultancy Independence Properties, believes Brazil will go from strength to strength.
"Brazil is at a very exciting point in its economic history. It is no longer perceived as simply a football-crazed party place. It has started to receive international recognition for its forward thinking economic policies and is rightly viewed as a sleeping giant.
"With the Brazilian real much weaker against the pound than it was a few months ago, now is a good time to get a foothold in a market with massive potential." |
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