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Buying To Let In Brazil – Investors Cash In On New Diamond Society

September 2, 2011Article by Ray Withers

Brazil may not be the first destination that springs to mind when considering global buy-to-let destinations but thanks to the development of the diamond society, one with a rapidly growing middle-class, investors are now rushing to secure healthy rental returns as well as hefty capital appreciation from Latin America’s superpower.

Traditionally pyramid shaped, Brazil’s society profile, due to sustained economic prosperity over recent years including the highest GDP growth rate at 7.5% for 25 years in 2010, is changing rapidly to a diamond shape commonly seen in the western world with some 33 million people rising to the middle class since 2003 alone. There is currently a 7 million housing deficit in Brazil with the majority residing in the North East of the Country. In addition to this many reports state that there is due to be a 20% rise in the country’s population over the next 10 years.

Higher incomes and greater access to finance have had a significant impact upon consumer spending amongst Brazilian’s with the nation now the fifth most important market for car manufacturers and 9.1 million looking to buy property this year alone.

Ray Withers, Director of international real estate agent Property Frontiers, which markets a number of investment properties in Brazil, comments, “Whilst the rest of the developed world has suffered during the recession, Brazil has shone brightly as a safe haven for many investors due to the strength of its economy. Things are really changing in this BRIC nation with the aspirations of millions of Brazilian rising fast and suggestion made that the economy is on track to become the fifth largest in the world 5 years ahead of schedule, by 2016.”

Access to finance has been a real turning point, especially for the Brazilian property market as recent reports suggest that 67% of the population are now in a position to buy a home, a massive increase from the 10% estimated in 2005. The demand for home ownership is so great that over R$34 billion has been injected into the construction of residential property across the country in recent years – yet supply still fails to meet demand. 

With a population of 1.3 million and growing, Natal, known as the ‘City of the Sun’, is one such destination where demand for housing from the middle classes is not being met. Capital of Rio Grande do Norte state, the most searched for location by property investors according to TheMoveChannel.com (August 2011), Natal is not only a regional economic hub but also an established tourist destination both domestically and internationally.

Within Natal, suburbs such as Capim Macio, one of the city’s top four income-per-capita locations and home to the new Golden Fields apartments available through Property Frontiers, are highly sought after residential locations by the middle classes due to their proximity to transport infrastructure, amenities and Ponta Negra beach.

Available from £59,200, 15% below market value with attractive staged payments, 2 bedroom apartments at Golden Fields offer investors a 4 year 6% rental guarantee with up to 35% capital appreciation forecast upon completion in 2014, perfect timing for the 2014 FIFA World Cup.

Already 40% sold, for more information and to secure the unit of your choice contact Property Frontiers today on +44 (0) 1865 202 700.

Author

Ray Withers

Ray has over 17 years’ experience in the international property market and bought his own first international property investment back in 2002. Aside from running Property Frontiers, Ray has been involved in residential, hotel, student and commercial property investment and development in both the UK and overseas and co-wrote "Where to Buy Property Abroad - An Investor's Guide". As Founder and Trustee of the Frontiers Foundation, Ray is directly involved with many of its projects to ensure they have a direct and tangible impact in individual communities across the globe. He is passionate about property, travelling, scouting out new opportunities and finding time to spend with his young family.
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