Rental properties has shown strong growth in 2011

Property investors are overlooking the strength of Brazil's rental properties as it has shown strong investment prospects in 2011, it has been claimed.

According to Property portal Brazilian Homes,   rental investors who rent out homes will be able to make a large profit from the 2014 world cup in Brazil.  The portal has added a lettings section to its services in response to the growth in the sector. Over 6 million foreign nationals have visited in 2010, an impressive 7.8 per cent increase over 2009 figures and forecasts for 2011 are set to be even higher.

Partner Alexander Wasastjerna explained: "As a result of the growing Brazilian tourism market, we decided to start offering rental properties as part of our Brazilian property portfolio."

Commenting on the prospects for the Brazilian tourism market, Tom Hall, travel editor at Lonely Planet remarked that the country has very strong prospects for growth in the near future. Lonely Planet has recently listed Brazil as the second best destination to travel to in 2011, just behind Albania. Indeed, the news is sure to interest buy-to-let investors as they will be able to benefit from the country's constant supply of tourists.

Glauco Chris Fuzinatto, UK and Ireland director at the Brazilian Tourist Office said that People are really considering whether they should be going to Brazil now, next year or the year after.

She commented: "I am not surprised that Brazil has been named as one of the best places to go [by Lonely Planet]. It has so much to offer."

In related news, Research conducted by STR Global has found that An increasing amount of individuals are turning to central and South American destinations for their holidays  and countries like Brazil are experiencing a resurgence in interest from British travelers, compared to last year.

Rio is seeing a shift from investors to lifestyle purchasers

With Rio De Janeiro playing host to both the 2014 World Cup and the 2016 Olympics, the city’s property market is booming and also people should buy property in Rio de Janeiro as it is a city for those with a "zest for life"

Marco Lomanto, products and destinations manager at Embratur, the country's tourist board, said that  the city has been one of the main cultural centres of the country, with its several cinemas, churches, museums, parks,  concert halls, art galleries and libraries. Cultural events such as the Carnival or New Year's Eve  and other attractions such as beautiful beaches, cultural heritage  make the city worldwide famous. Besides, the beaches of the Copacabana, Leblon , Panema and Barra da Tijuca were picked out as destinations to chill out in. Moreover, the city offers the best potential for investors as a range of high-quality developments and inward investment has resulted in huge capital growth.

Tom Hall, editor of the Lonely Planet guides, told the Guardian that exploring Rio could take three or four days and there are a number of beach suburbs which should be checked out  such as Ipanema, Leblon and the Copacabana. The Sugarloaf Mountain and Corcovado’s statue of Christ the Redeemer are other must-see things in Rio as they provide stunning views of the city. He added that if tourists have seven full days, they should consider heading west from Rio to Paraty, a lovely colonial city that’s close to dozens of great beaches. It’s a four-hour bus ride away. Closer is Angra dos Reis, from where they can catch a ferry to idyllic Ilha Grande.

Meanwhile, Hakan Olsson from Rioapartments website stated that property prices were on the rise well before the Olympic win was announced in October last year.

He commented: “For sure (the Olympics) is one of the very strong reasons prices will rise in the coming five years, but not the only reason. Besides the World Cup and the Olympic Games,  the state’s flourishing oil industry and tourism is a major factor supporting the property boom and Many Brazilians come here to work in the oil business, of which Rio is the capital in Brazil”.

Brazil has become compelling buyers market

Investors are increasingly looking to Brazil to get a return on their money with the recent slowing of the pace of growth seen in the Brazilian property market.

According to Property Secrets, Joao Crestana, president of the Sao Paulo Housing Syndicate (SECOVI-SP) said the rapidly rising prices seen last year created an atmosphere in which buyers felt the pressure to do business quickly to take advantage of the situation. As it was only taking two months for an entire development to sell, People who wanted to buy were forced to close their purchases quickly. However, he said that this year, with similar levels of supply but a slower pace of sale, people have enough time to make choices.

A new report RNCOS has revealed that the Brazilian property market is considered to be one of the most interesting sectors in the industry and has witnessed "stupendous" growth recently. The report also stated that Brazil has undergone vigorous development in the last few years but will continue to grow as the housing market is still experiencing a large demand-supply gap and by 2014 housing demand in the country will have reached 1.8 million units.

"The government's assurance to the development of housing industry and positive policy framework has encouraged developers to invest in the Brazilian housing industry," the report claimed.

David Palumbo, director of Origen Private Equity Ltd said that there are still significant profits to be made in the property market in Brazil and investing in some of the poorest areas of Brazil, such as Natal, helps bring the residents into low-cost affordable housing and gives them a sense of belonging and dignity.

He commented: "Impact investing can deliver high, consistent returns to investors and at the same time have a positive and measurable social impact."

Investing in Brazil property may be better than buying gold

Investing in Brazil is a "smart move” as property expert urged newcomers to look beyond "overvalued" assets like gold.


David Kuo, director at investing website Motley Fool said that it was valuable buying gold a couple of years ago, because "nobody" was showing a particular interest in the metal.


"Now that everybody is buying gold … you have missed the best gain," he commented, which may prompt investors to seek alternative opportunities in Brazil, such as property investment as Property prices in Brazil are growing alongside demand in the country.


He explained that gold was overvalued and there are predictions that gold could reach $2,100 (£1,300) an ounce. But the danger with that is gold is already over $1,800 an ounce now. Before gold reaches its peak in value, Mr Kuo warned that it may only have another $300 to gain.


According to a recent report published by the Global Property Guide, property prices in Brazil are rising due to growth of the housing market, driven by the strong economy, growing demand and the burgeoning tourism industry as well as the increase in the accessibility of credit. Property values in Sao Paulo alone rose by 20 per cent in the last year, A Place in the Sun reports. Nearly 80 per cent of properties in Sao Paulo are sold within six months, a fact that proves demand is very strong.  


This view is supported by the new report from RNCOS which stated that housing finance is growing at a very rapid pace and this increase is expected to continue as demand for Brazilian property is expected to reach 1.8 million units by the end of 2014. However, the company stressed that the fundamentals of the housing industry remain strong despite the supply-demand mismatch and will continue to maintain its momentum following the rising level of investment from developers.

Fortaleza, in the north east of Brazil is a key location to purchase

Fortaleza, in the north east of Brazil is rapidly becoming a hotspot for property investment, an expert has recommended.


Writing for the magazine, Ronan McMahon, real estate marketing director at International Living said that Fortaleza is the destination of choice for Brazil's holidaying middle class, with over three million paying a visit every year. Due to high tourist trade, he said that rental properties will offer property buyers an attractive return and the region is likely to increase in value as the government pours in investment for the upcoming World Cup in 2014.


He commented: "Fortaleza has become Brazil's biggest domestic tourism destination. Its strategic location close to Europe and the US makes it a logistics hub. And, with the help of a tax-free zone nearby in Pecem, it's the perfect place for export-focused manufacturers to locate.”


According to the Global Property Guide, North east Brazil has traditionally been the poorest area in the country, has now become Brazil's "star economic performer" and cities particularly Natal, Recife and Fortaleza is undergoing a massive transformation. Prior to the recession, investment opportunities here were concentrated on tourism and the second-home luxury market geared towards European buyers. Currently, the city of Fortaleza benefits largely from the residential property boom and improved tourism infrastructure.


Meanwhile, Buyassociation.co.uk said that the north east of Brazil offers a unique opportunity as not only is it welcoming foreign buyers but also has a local population that is keen to get a foot on the ladder with this inward investment has resulted in huge capital growth.

Brazilian govt launching series of initiatives to make property investment easier

People looking at buying   property in Brazil could be interested to hear the country has been described as one of the world’s most investor-friendly nations as the Brazilian government is launching a series of initiatives.


The reports from Dow Jones newswires stated that Ministers intend to increase the transparency of real estate funds as the government seeks to attract more investors.   Accompanied by a growth-fuelled real estate boom in Brazil over the past few years, the move has come amid a growing popularity of these real estate funds, known as Breifs. Due to government intervention, funds will have to reveal the values of their properties whenever they change – a regulation that investors predict will result in a wider secondary market for Breif shares trading.


Furthermore, the government also aims to make things easier for the process of purchasing property and making briefs easier to understand for people interested in investing in Brazilian property.


According to Reuter’s reports, Ministers in Brazil are considering leasing out farm land to foreigners in a bid to attract more foreign investment. The move is ways to circumnavigate restrictions on land sales with the intention of dissuading speculation, while still providing an attractive opportunity to overseas investors. Agriculture minister Wagner Rossi said that the government is becoming more open to outright land purchases.


Meanwhile, Paul Collins, editor at BuyAssociation.co.uk, said that  the government proving very successful in the measures they put in place to mitigate the effects of the global downturn and the country's economic strength is its best asset as far as investor are concerned.


Mr. Collins commented: "The economy is still growing, and by the time they have had the Olympics and World Cup go through the country, it is predicted to be the fifth largest economy in the world. In terms of buying property overseas, particularly for Brits, there is a lot of opportunity."  


Vikas Shannon from Agente Imovel explained that the introduction of Minha Casa Minha Vida has led to an increase in the number of investments in the sector and low-income families gain the opportunity to get their own home. According to President Dilma Rousseff, The Minha Casa Minha Vida project is now entering its second phase. She also said that the government plans to invest R$140 billion (£55 billion) to build around two million homes before 2014.

Brazil’s property market growth is sustainable

Investors will find "attractive opportunities" in the Brazilian property market for gains in the long term as it is well on the path to sustainable growth.


Sergio Luiz Canaes, the ambassador of Brazil in Saudi Arabia, said that Brazil has so much to offer as it is a country of many vocations. Agriculture is its dominant product with its full potential yet to be realized. The country has strong demographic and macroeconomic fundamentals which suggest it will experience continued growth. He also said that he hopes as Brazil continues to grow, so will the trade links between the two nations which is good news for investors from Saudi Arabia.


He commented: "Economically, Brazil is a country of abundant natural resources and of a broad agricultural and industrial base, with a competitive economy.  Brazil is well on the path to sustainable growth, despite fears of a bubble”.


Writing for National Real Estate Investor, David Lynn, managing director, generalist portfolio manager and head of investment strategy for Clarion Partners in New York has stated that the dynamic economy, expanding real estate markets, large and young urban population, relatively low systemic and political risks continue to support Brazil's case as an investment market.   Brazil represents a very attractive investment opportunity short and long term for those interested in real estate.


Meanwhile, Obelisk International said that a clear way to measure the success of a property market is to look at levels of real estate funds, as in Brazil these investment funds are bigger than ever. The number of real estate investment funds last year grew to 101, an increase of 13 per cent with the value of the funds   net worth reached R$8.3 billion (£3.2 billion) last year, an increase of 62 per cent on the previous year.