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The Low Down on Brazil Property Investment

Jun 8, 2008
It's an undeniable fact that Brazil is gaining ground in popularity among individual investors as the media hype promoting the country steps up a gear. Investors and buyers led to the market by the positive press promotion of Brazil are, on the whole, then doing their own due diligence and determining that there remain excellent fundamentals on which an investment decision can be taken.

With even the British newspaper the Sunday Mirror promoting the virtues of real estate purchases in Brazil, it seems that maybe even those seeking a second home overseas for brief holidays will be on the property investment in Brazil bandwagon by the end of the year - so what does this actually mean for the market, will it become oversaturated, oversold and over-promoted?

Basically because Brazil led by its political authorities, has committed to a fiscal and political overhaul that has so far been successful. International eyes are on the nation and accordingly foreign direct investment is confidently flowing inward, suggesting that there is long term room for growth in all sectors especially real estate and tourism.

As a direct result of these facts, greater promotion of the nation as a desirable and safe place has followed and this has attracted international interest from the likes of General Electric Real Estate at one end of the scale to perhaps your neighbour or cousin who's just seeking an apartment abroad at the other end of the scale!

According to Amberlamb, "we still consider Brazil an emerging market - just - because quite simply it has not been tried and tested and then tried again! Yes, with the likes of Donald Trump entering the development market and General Electric Real Estate committing to massive and sustained investment commitment as aforementioned, Brazil's property market is certainly a market in transition - but we like to remain a little cautious and would advise potential investors to remain the same."

When one considers the possibility of property in Brazil becoming overpriced - one can be assured that this is not going to happen any time soon, because there is still plenty of property stock to go round and there are very real affordability limits dictated by the domestic market. In other words, housing prices in Brazil currently remain highly competitive. Having said that - because investor interest is now so strong and because travel and tourism interest is currently growing at a rate of about 7.2% annually according to the World Travel and Tourism Council, there are developers and agents cashing in on a wave of relatively na´ve speculative behaviour among some less experienced investors.

It is imperative that an investor looks closely at a potential purchase, examines exactly what is being offered, included and guaranteed for the price and compares like for like across other properties or developments and across similarly attractive locations to ensure they are not being asked to pay over the odds. Often an investor secures the majority of their potential investment success at the point of purchase in a market like Brazil's - so as the old adage goes 'buyer beware!'

In terms of accessibility, the main area of tourism and investment interest in Brazil is Rio Grande do Norte - it is also the safest region in Brazil and the region receiving the most money in terms of infrastructure and accessibility improvement. As a result the region is easily and affordably accessible from Europe and the UK and so you could say it's easy to fly to Brazil and you can definitely say it's getting easier and cheaper all the time.

Many factors demonstrate the importance of support of investment commitment in Brazil - some of the key factors include the Brazilian government that is completely supportive of foreign investment - and this support also extends to the promotion of tourism interest as well.

The Brazilian political authorities understand that both are required for the benefit of their economy's stability. The main way the Brazilian government is seeking to support foreign investors is in an holistic way by ensuring economic, social and political stability in Brazil so that the broader marketplace remains attractive to investors and the nation remains a growth hub in the region.

In addition to this, the Brazilian government has sophisticated and well developed real estate laws which protect the buyer whether they are foreign or local which gives investors great confidence. The government is also an investor in infrastructure development programmes in Brazil which indirectly support investors as they raise the appeal of locations where road and air access has been improved for example.

Therefore, the fact that everyone is seemingly jumping on the property investment in Brazil bandwagon, will not only prosper the nation as a whole, but the one truth remains: the fundamentals for profiting from property in Brazil currently remain excellent.
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Brazil Property Select offers a comprehensive selection of overseas Property in Brazil, news, members club and reviews of the latest property developments.
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