Investors Dominate Foreign Segment Of Brazilian Property Market
News Posted On: 14 December 2012
Price growth of 12.46% in the year ending Q3 2012 saw Brazil ranked second in the Global Property Guide index. So perhaps we shouldn't be surprised to learn that investors are now dominating the foreign buyer segment of the Brazilian property market.
According to UV10, an agent specialising in sales of Brazil property to foreign buyers, lifestyle buyers have been completely overtaken as the main buyers of Brazilian property, and pure investors are now almost the sole buyer of Brazilian property – mainly Brits too.
Samantha Gore, Sales Manager for uv10.com, explains, “When we set up almost six years ago, we had a truly international client base – Brits, Americans, Australians, Canadians, Scandinavians and Dutch, who were mainly looking for a Brazilian beach-side bolt-hole for sunshine holidays. They were the pioneers, the ones who loved Brazil for its culture and cuisine, coastline and Carnival. Today the shift is marked. Ever since Brazil became an economic powerhouse, rich in oil, elevating millions upon millions of people from lower class to middle class and about to host famous global sporting events, the holiday home buyer has been all but replaced by the pure investor.”
According to the firm Brits are leaving the most enquiries, with “entry level investment” properties proving to be the most sought after. But perhaps the most surprising thing in the report is the apparently renewed confidence to buy off plan property. Off plan property was one of the biggest nightmares of the crisis, because of the number of properties which never got built leaving investors out of pocket and analysts doubting whether off plan buying would ever return.
But according to UV10 its two big sellers this year have both been off-plan properties aimed at the local Brazil market, namely Golden Fields and Natal Beach Cup, both in the north-eastern region of Rio Grande do Norte. The developer of 50-unit Golden Fields, due for completion in 2014, is offering a 6% four year renewable rental guarantee and there are just five units still up for grabs. Recently launched Natal Beach Cup has the same guaranteed four year 6% rental return or full rental management for those choosing to operate outside of the guarantee.
Hold on the surprise just a minute though. We have seen this trend before; the domination of Brits coupled with confidence to buy off plan for the allure of a rental guarantee, and the linkage comes from SIPPs. SIPP investors will research carefully so as to minimize the risk of buying off plan, while the rental guarantee and/or management allows them to gauge their return on investment. However, there is no mention of these developments being SIPPable, although that doesn't mean they aren't and the latter being a resort property with management means it more than likely is allowable as part of a SIPP.
Whatever the cause, according to UV10 “the Brits are back” let's hope we can all start showing the same kind of confidence in the British economy as these investors are about that of Brazil.
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Written by Les Calvert
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