Everyone’s going nuts over Brazil, the place of the moment for property investors.
The nation is the stand-out success in the world’s property market – with prices surging upwards by 26% last year, according to the Knight Frank global house price index.
The outstanding performance was more than double the next best market – the Baltic State of Estonia.
Brazil has finally arrived on the international scene with a vibrant emerging economy and the next host of the World Cup and the Olympics.
For property investors, Brazil is the place to be – and the country is firmly on the map now BBC TV’s Michael Palin has turned his camera on the quirks of the nation.
Natal’s palm-fringed beaches
“Brazil, a new addition to the index this quarter, tops the rankings with 26% price growth in 2011. This remarkable performance is being fuelled by strong population growth, rising household wealth and an expanding mortgage market,” said Knight Frank’s Kate Everett-Allen.
Brazil property investors are often steered away from the thriving city of Sao Paulo to the quieter city and region of Natal in north east of the country, with mile after mile of coral white sandy palm-fringed beaches.
In fact Brazil has 7,000 miles of beaches and an average daily temperature of 27 centigrade – but ask yourself who do you know who has ever holidayed in Brazil?
The choice is buying in to hotel resorts or villa/apartment developments as holiday homes in Natal or investing in to traditional buy to lets in the bigger industrial cities.
The problem is in so many countries, hotel resorts have fallen flat for investors as promised infrastructure plans to bring in tourists by road and air have failed to materialise.
Sao Paulo, the thriving metropolis
In Brazil, a new class of consumers who need to work to earn cash to spend is proliferating in the cities.
Investors might want to forget about their holiday dreams and look at he returns from buy to lets.
According to the latest local FIPE-ZAP property index, property in Sao Paulo increased in value 17.9% in the past 12 months, while rents were up 9%.
Prices have increased a stunning 85% in the last three years, with rents soaring by 44% – and the trend is still pointing upwards.
Sao Paulo is Brazil’s largest city, although the capital is Brasilia. Sao Paulo is also the largest city south of the equator and the world’s seventh largest city, with a population of 11 million.
As the powerhouse of the Brazilian economy, the city economy is based on business – and as the economy grows, so does the city, drawing in new workers who need somewhere to live.