The central issue in this thread revolved around the assumption that property valuations is a determinant factor in the return of investment provided by Brazilian properties. A general consensus was voiced out by most members in support of the view that rises in property values is neither a 100% assurance for a return of investment, nor does it represent the overall state of the Brazilian property market.
Forum participants reiterated the importance of research and first-hand observations on the properties offered before making any investment. This is because hearsay and speculation have produced two distinct sectors in the Brazilian property market. One, the market exists for the locals and second, it exists for the foreigners. In which, the latter usually sport much higher values as compared to what is really sold in the local market. Therefore, it is essential for foreign investors to be aware of these local market prices in order to prepare for the event of reselling their properties. Hence, since the locals will most certainly make up the majority of the potential buyers, a high-priced property wouldn’t sell as easily as compared to the properties priced according to the local’s expectations.
Moreover, in terms of expecting a good return of investment, many participants purported that selecting a location where a strong demand for real estate properties exist would present a more realistic outcome. Such prime locations in Brazil are the local and international tourist’s hotspots of Natal, Fortaleza, Bahia, Recife, and even Aracaju.
Brazilian Economic Factors Point towards Promising Investment Potential
Although it would be difficult to predict a 100% return of investment in the Brazilian property market, there are several factors that point towards this enormous potential. This is in order that the said property market will be able to yield various significant investment opportunities. First of these are the progressive economic policies enforced by the government in order to help facilitate a strong, stable economy, as well as develop an equally supportive fiscal and political environment. Foreign investments that are coming in the country are supported by the improvements in the country’s infrastructure. Plus, you can add the country’s current currency rates which are favorable for investors. This steady economic growth is also fueled by the thriving international manufacturing companies in Brazil, as well as the anticipated self-sufficiency of the country due to its oil reserves.
All these go hand-in-hand with Brazil’s aim to become one of the world’s top 20 premiere tourist destinations. This is since its tourist industry has attracted over 9 million visitors in 2007 alone. Hence, the arrival of these tourists had a positive effect on the thriving investment potential of Brazil, particularly in the emerging property market. Pushed by the local’s slowly improving fortune brought about by their stable economy, the influx of tourists and their demands for accommodations , and the increasing popularity of the country as a second home destination due to the low cost of living in the country, the Brazilian property market has really shown promising potential for all types of investors. This is evident in the capital growth and the considerable rental income that was yielded by the properties located in the current tourist hotspots, particularly the ones at the northeast and at the seacoast regions of the country.
All these copious factors point towards the country’s investment potential. Aside from this, it also points to Brazil’s impending status as one of the world’s leading economies, one that matches the strength and stability of Russia and China.