Overseas property investors are flocking to fuel a boom in Brazil and help take investment to a record high.
Many are attracted by the potential of the 2016 Olympic Games being staged in the country while others see profits in a burgeoning economy.
Demand is being fuelled by rising incomes and more opportunities for the country’s construction industry to develop.
In addition, overseas property investors are currently enjoying returns that are double what is being achieved in the US and China, according to a report from Ernst & Young Terco (EYT).
Their research puts the amount of foreign investment in Brazilian property at between £1.5 billion – £3 billion.
Tourist boom
EYT also estimates that the GDP of the investments equates to £50 billion and, potentially, rising to £80 billion over the next 10 years.
In addition, says the country’s tourist board, Brazil is becoming increasingly attractive to tourists.
A spokesman said: “Brazil is attracting the attention of the world and we have been investing heavily in our infrastructure to make it more attractive and accessible for people who to enjoy long-haul holidays.”
Indeed, tourists are already heading there in growing numbers – with a rise of 13.5% in the number of flights there last year.
And that number is set to soar after the country’s Civil Aviation announced it would improve airport services across the country and reduce check-in times with more staff.
Untapped reserves
The tourism boom also underlines another aspect of the EYT report ‘2012 Attractiveness Survey for Brazil’, which illustrates how Brazil is more attractive to potential investors than its Latin America neighbours with around 6 out of 10 business leaders saying this was a country to set up future operations.
They point to a growing middle class which is leading strong domestic demand, along with vast untapped reserves of natural resources.
In addition, Brazil is considered to be an ‘open society’ and welcoming to visitors which, along with improved regulatory framework and access to financing, are helping drive the country forwards.
Brazil is the world’s second most popular destination of foreign direct investment – and fifth in the number of projects. The cash boost has led to the creation of more than 160,000 jobs.
The UK, Japan, USA and Germany are leading investors but China is quickly emerging as the strongest partner for Brazil with investment and trade agreements in place. The top destination for overseas investment is Sao Paulo with a quarter of investment of projects. In second place for investment is Rio de Janeiro with 8% of projects.
