Price Increases On The Brazilian Horizon

Brazil property prices could start rising in the near future an international property investment consultancy has warned.

“Demand for Brazil property is growing at a phenomenal rate. Most people are still testing the water but the sales are picking up as well,” said David Cox, director of Property Frontiers.

“We are selling a luxury beach-front resort development in Natal, which is honestly one of the finest developments I have ever seen at prices starting from under £150k. With Brazil’s economy set to grow into one of the fifth largest in the world, accelerated by the recent discovery of oil, and now by the World Cup and Olympics being hosted in the country, not to mention a WTTC forecast for 5.3% annual tourism growth between now and 2017, and you can see why developers will soon feel the need to increase the returns from their investments,” Cox explained.

Brazil is already the ninth largest economy in the World on its $1.9 trillion purchasing parity, which also makes it the second largest in the Americas. Earlier in the noughties Goldman Sachs said that Brazil would be the fifth largest economy in the world by 2050, based on its 2001 growth rates. However, a lot has changed since 2001 and the Brazilian President Lulu is now predicting that Brazil will be the fifth largest economy in the world within a decade.

“If we keep this rhythm I have no doubt that we can be the fifth economy in the world in 10 years,” Lula said during a meeting with General Motors (GM) executives.

Driving Brazil’s economy is partly the massive agriculture sector, which is one of the top 5 in the world, but mainly the massively growing industrial and services sector. Of course tourism is one of the fastest growing sectors within the services arena, and that is one of the main reasons why Brazil property is so popular with foreign investors.

Sales of Brazilian property suffered about as badly as sales of overseas property everywhere, when fear over just how bad the crisis would get paralysed buyers everywhere. That said, the suffering in Brazil’s property market was about the shortest in the world: the buyers vanished in the final quarter of 2008 (though sales had been slowing for 4-5months) and they started to return in the second quarter of 2009.

Because of this Brazilian developers and agents never had to drop prices, or enact special offers. The market was basically on a temporary pause, and it stands to reason that the price increases — which have also been on pause — will be restarting sometime soon.

Property Frontiers have particular reason to be sure in their assertions. The development they are offering — as mentioned by Cox — the Natal Ocean Club is of such extreme quality and in such an exquisite location, prices can only rise with the World Cup coming to town.