Blindness and stupidity when investing in Brazil

[Golfingworld]

so you are in my camp then surfing! Glad to hear it....was my impression too!

 

[robh]

I find it funny that I get the opposite impression from hotel operators. No-one is claiming it will be a bumper year, but the figures are ok!

 

[JMBroad]

I don't feel assured that it will be a disaster of a year for tourism yet because I don't understand what you are basing your assurance on.

Yes, the strength of the real will put off some cheap and cheerful tourists who may go on an all included package instead. There are crooks upping the price to change money almost everywhere (or at least it is to be expected). I learnt that in Madeira at the age of 9 when I exchanged my meager pocket money from Pounds to Escudos and later realised I could have gotten a lot more just around the corner.

Brazil retaliating with regards to Spaniards entering the country. Well if Britons were treated the way the Brazilians were in Madrid, (small baby not being given food or water for 8 hours while they were kept at the airport to be deported) I think the UK might do a lot more than start sending Spaniards home.

GNG was never meant to be ready for years anyway so not sure if that was related to your forecast or just a side comment.

Regarding the Real:

The real lost 1.5 percent yesterday to 1.6987 per dollar. The dollar dropped to a record low against the euro and below 100 yen for the first time since 1995 amid concern the U.S. economy is in a recession.

Brazil will tax local debt purchases by non-residents and end a requirement that exporters repatriate part of their proceeds in a bid to stem the currency's appreciation, Finance Minister Guido Mantega said late yesterday. The government created a 1.5 percent tax on purchases of real-denominated, fixed-income securities for foreign investors, Mantega said.

Someone mentioned earlier that you are in the trade? Do you have access to reservation figures and can compare them to past years and is that what you are basing your predictions on or is it just a hunch?

 

[michaelbush]

The real against the dollar has been moving ever stronger, with rate just 1.66 little more than a week ago, compared to 1.90, 6 months ago, and 2.10 a year ago. The euro recovered to around its value some 6 months ago at spot 2.63, having been as low as around 2.52. The euro is now the favoured currency, and is strong against all others.

I see the real, long term, as remaining strong, due to the strength of the Brazilian economy, so dont expect too much soon in the way of better rates. The government cannot afford to release too much spending power or credit into the ecnonomy, too quickly, and they are gradually reducing interest rates. Inflation is manageable at around 4.15%, and they do not want to see it higher.

Regarding the exchange houses - they have always been greedy with a spread of up to 12 cents either way, plus many charge commission on top. Have you checked what you get at UK airports for Euros lately? I expect not more that around 1.22 before commission.

 

[Golfingworld]

Seeing as this is a flight thread, I'll stick to flights. The result of This Thomson pull out means that there will be no direct flights (seemingly charter or scheduled) from The UK to Natal until at least October 2009 or the next 20 months as Charter programmes normally change in April or October..I doubt any charters will go back in April 09. TAP artificially inflate their prices to Natal if you look at Salvador and Belo Horizonte there are reasonable prices to the UK but not from Natal. I would guess that for the next 18 months flight prices with TAP to Natal could reach as high as GBP900 return as they have a monopoly on the route. This is very significant and with exchange rates Natal is not at all a good destination to invest and hopefully this will bring some reality back to prices there. I think Recife will certainly become the gateway and it seems signs are already there with CVA and maybe Delta, that is good news for them. Recife is a fine airport and for sure has plenty of capacity, it struck me as very efficient, everything Natal isn't. With the best will in the world, putting the first private funding in place and then constructing a mega airport you have to be looking at 7-10 years. Whatever people say there will need to be good "all in" hotel accomodation in place near to these resorts, to entice back Tour Operators. It seems Sauipe already has this. Plus, if Recife has already stolen the march on Natal, would BAA, INA or the Spanish airport operators invest such a huge sum to be only 30 mins up the road for a capacity of 5 million?? Finally, the real truth about Natal's mega airport is coming out and not before time. Invest in Natal area with caution and if you really want to the haggle and haggle again...it's a buyers market there now!

 

[Cam101]

Seeing as this is a flight thread, I'll stick to flights. The result of This Thomson pull out means that there will be no direct flights (seemingly charter or scheduled) from The UK to Natal until at least October 2009 or the next 20 months as Charter programmes normally change in April or October..I doubt any charters will go back in April 09. TAP artificially inflate their prices to Natal if you look at Salvador and Belo Horizonte there are reasonable prices to the UK but not from Natal. I would guess that for the next 18 months flight prices with TAP to Natal could reach as high as GBP900 return as they have a monopoly on the route. This is very significant and with exchange rates Natal is not at all a good destination to invest and hopefully this will bring some reality back to prices there. I think Recife will certainly become the gateway and it seems signs are already there with CVA and maybe Delta, that is good news for them. Recife is a fine airport and for sure has plenty of capacity, it struck me as very efficient, everything Natal isn't. With the best will in the world, putting the first private funding in place and then constructing a mega airport you have to be looking at 7-10 years. Whatever people say there will need to be good "all in" hotel accomodation in place near to these resorts, to entice back Tour Operators. It seems Sauipe already has this. Plus, if Recife has already stolen the march on Natal, would BAA, INA or the Spanish airport operators invest such a huge sum to be only 30 mins up the road for a capacity of 5 million?? Finally, the real truth about Natal's mega airport is coming out and not before time. Invest in Natal area with caution and if you really want to the haggle and haggle again...it's a buyers market there now!

Hi GW

How is your place in Natal coming along?

 

[JMBroad]

It is by no means a buyers market. in fact it is very much a sellers market in many respects. This does not mean that there isn't the odd family builder who is willing to negotiate prices (probably because they realised a gringo was talking to them and they started three times higher than normal and so can afford to offer a large "discount")

Oh and if he can get to natal by road from recife in 30 minutes he should definately enter the Gumball 3000 because he'd win it hands down. In fact he'd probably reach the final checkpoint before the last participant even left Pall Mall.

Recife Airport is 385% the size of Natal airport yet welcomes only 81% of the international arrivals Natal does. Or, if you don't like percentages;

Recife airport Capacity: 5.000.000 p/a
Natal airport Capacity: 1.300.000 p/a

Recife Intl arrivals Jan-Dec 2007: 177.149 p/a
Natal Intl arrivals Jan-Dec 2007: 218.823 p/a

Regarding growth, compare those figures to these:
Recife Intl arrivals Jan 2003: 11.941 p/a
Natal Intl Arrivals Jan 2003: 4.671 p/a

Recife Intl arrivals Jan 2008: 20.732 p/a
Natal Intl Arrivals Jan 2008: 23.770 p/a

I think it may be a "slight" exagerration (hard to believe with GW as his facts are always so researched) to say that "Recife has already stolen the march on Natal"

I think finally people are starting to see exactly who is pushing the hype - we all just haven't figured out if desire for attention is the only driving motive.

 

[mitico67]

Let's not forget that Recife got 3 times the internal passengers than Natal, plus it seems that is quite possible to get cheap flight from London to recife if the info on the flight thread is correct. I've input a few date on the website and the price are around 600€.I cannot see how Natal is considered a seller market, I've contacted several developers and their price are 15% cheaper than 8 months ago. I'm talking in € prices. If Natal doesn't play the flight issue in a smart way, it can loose out to the other city in the North east that up to now have not received much hype from the international agents

 

[Golfingworld]

Mr Broad, what's the Portuguese for "pushing water up hill"? If you really understood the airline business and flight statistics you'd know that Recife is only 30 mins flight from Natal....airlines will look at landing fees, frequency, crew costs and load factors. Let's help you a little with interpretation of your data and analyse it. Assuming you are correct with capacity.....if Natal is going to expand it can only reach 1.3 million, whereas Recife can reach 5.0 million..........so if the market is going to expand in the next five years...where is that expansion going to come? Bear in mind that passenger transit figures are normally in and out ..so Recife only has 2.5M inbound and Natal 0.7M inbound. How do you base you theory of a "sellers market" on a maximum of 700,000 people entering if the airport in Natal runs at capacity in the next five years? Bear in mind that Domestic arrivals are more than 70%, so of these allegedly approx 500.000 Brasilians arriving in Natal, how many will pay silly Gringo prices to boom the local off plan market and buy through foreigners or Agents in Spain.....answer none! Try doing your stats to win the Euromillions Rollover draw, you've got better odds than your concocted stats to try and creat a false boom in Natal. Recife will have for at least 7 years......Natal will be a "me too" trying to catch up.

 

[robh]

Let's not forget that Recife got 3 times the internal passengers than Natal, plus it seems that is quite possible to get cheap flight from London to recife if the info on the flight thread is correct. I've input a few date on the website and the price are around 600€.I cannot see how Natal is considered a seller market, I've contacted several developers and their price are 15% cheaper than 8 months ago. I'm talking in € prices. If Natal doesn't play the flight issue in a smart way, it can loose out to the other city in the North east that up to now have not received much hype from the international agents

Hi Mitico,

I haven't seen any developers dropping their prices unless it is for really bad developments which would never sell anyway.

If I remember correctly you went out to Brazil on an inspection flight with a very well known agent who adds at least 10% to the prices on developments? The agent registered you with the developer and the developer was obliged to sell to you at the higher price at least for 3 months or more.

I am not sure Recife will ever take off as a destination as it has too many factors going against it.

Regards,
Rob.

 

[mitico67]

Hi Rob, *** just show me 4 developments and they didn't look a bargain to me . That's why I made contact with other developers and friends not agents and I had a look at another dozen of places. Of course if you do not ask you do not get. You are a pro and are on regular basis on the north est so you should be aware at the amount of off plan and resale properties available. Everyone is different and as I'm looking for a short term return I do not see natal and Brazil (strong reais,not beeen able to open bank account,cheap flights...)as the ideal investment for the moment. Of course if I was relocating over there some of these problems will not be a main issue.

 

[JMBroad]

I don't know of any developments which have lowered their prices recently. Could you tell us which ones did - I'd be interested in seeing who they are and how much they dropped in prices.

However land prices have gone through the roof and the local developers are increasing their prices significantly and achieving massive results. As I mentioned earlier, several developments aimed at the domestic market sold out within hours of release at much higher prices than what was historically the norm.

 

[surfingbrazil]

GRUPO SANCHEZ is filing for bankruptcy !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Whoever paid instalments to these people… well the money is gone ! bye , bye

( ############### Quote
Barcelona, 22 mar 2008 (EFECOM).- La inmobiliaria Grupo Sánchez, controlada por José Antonio Sánchez Santamaría y Pilar Romero y con sede en Manresa (Barcelona),ha ido a proceso concursal de acreedores -el equivalente a la antigua suspensión de pagos- con un volumen de deudas de 97 millones de euros.
Según publica hoy La Vanguardia, el proceso concursal se ha presentado en los juzgados de lo mercantil de Barcelona, si bien todavía no ha sido asignado a algún juez en concreto.
Grupo Sánchez se ha visto afectado por la fuerte crisis que vive el sector inmobiliario y cuenta con importantes inversiones en segunda residencia en Alicante, en la Costa del Sol y en las playas de Natal, en Brasil, y en este último lugar la inmobiliaria asegura que ha invertido 38 millones de euros.
Entre los principales acreedores de Grupo Sánchez se encuentra Caja Madrid, Caixa Catalunya y diversos proveedores de la promotora catalana.
La continuidad del grupo pasa por la venta de las promociones de Natal para lo que mantiene conversaciones avanzadas con diversos inversores, si bien ahora cualquier transacción la deberá aprobar el juez que tutele el proceso concursal. EFECOM.- ml/txr
################################ Unquote )

Indeed another alarming sign and yet another proof of the gigantic scam going on ,as I previously said.

Any blind investor around ?

 

[robh]

GRUPO SANCHEZ is filing for bankruptcy !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Whoever paid instalments to these people… well the money is gone ! bye , bye

( ############### Quote
Barcelona, 22 mar 2008 (EFECOM).- La inmobiliaria Grupo Sánchez, controlada por José Antonio Sánchez Santamaría y Pilar Romero y con sede en Manresa (Barcelona),ha ido a proceso concursal de acreedores -el equivalente a la antigua suspensión de pagos- con un volumen de deudas de 97 millones de euros.
Según publica hoy La Vanguardia, el proceso concursal se ha presentado en los juzgados de lo mercantil de Barcelona, si bien todavía no ha sido asignado a algún juez en concreto.
Grupo Sánchez se ha visto afectado por la fuerte crisis que vive el sector inmobiliario y cuenta con importantes inversiones en segunda residencia en Alicante, en la Costa del Sol y en las playas de Natal, en Brasil, y en este último lugar la inmobiliaria asegura que ha invertido 38 millones de euros.
Entre los principales acreedores de Grupo Sánchez se encuentra Caja Madrid, Caixa Catalunya y diversos proveedores de la promotora catalana.
La continuidad del grupo pasa por la venta de las promociones de Natal para lo que mantiene conversaciones avanzadas con diversos inversores, si bien ahora cualquier transacción la deberá aprobar el juez que tutele el proceso concursal. EFECOM.- ml/txr
################################ Unquote )

Indeed another alarming sign and yet another proof of the gigantic scam going on ,as I previously said.

Any blind investor around ?

It doesn't say anything about any deposits disappearing at all nor anything about a scam.

 

[surfingbrazil]

It doesn't say anything about any deposits disappearing at all nor anything about a scam.

No, it does not.
I am the one saying all this mumbo jumbo about the 100. Thousands tourist beds in and around Natal is a SCAM.
You are an agent, please act as a decent one and do not try to minimize the fact that filing for bankruptcy are indeed a very , very bad news for any one who might have paid money on account to these guys.

Do you really think that after the Spanish banks, the Social Security, the IRS and all the other “big guys” is there going to be anything left for the “blind investor” ?

 

[robh]

No, it does not.
I am the one saying all this mumbo jumbo about the 100. Thousands tourist beds in and around Natal is a SCAM.
You are an agent, please act as a decent one and do not try to minimize the fact that filing for bankruptcy are indeed a very , very bad news for any one who might have paid money on account to these guys.

Do you really think that after the Spanish banks, the Social Security, the IRS and all the other “big guys” is there going to be anything left for the “blind investor” ?

read my reply in the other thread you created.

 

[michaelbush]

No, it does not.
I am the one saying all this mumbo jumbo about the 100. Thousands tourist beds in and around Natal is a SCAM.
You are an agent, please act as a decent one and do not try to minimize the fact that filing for bankruptcy are indeed a very , very bad news for any one who might have paid money on account to these guys.

Do you really think that after the Spanish banks, the Social Security, the IRS and all the other “big guys” is there going to be anything left for the “blind investor” ?

If I recall all the reservation depoosits were being held in an escrow account. Hopefully investors will be able to get their money back!!
However this is indeed very bad news, but most probably was precipitated by the home market in Spain where they were having great difficulties with the market being so bad.

 

[surfingbrazil]

Hello,

We need more petrol into the fire.

Here is another one to scare the Sh**** out of the off-plan adventurous!
Grupo Sanchez is only the first big one outside Natal.

The memory is weak and some have already forgotten the projects that are stopped in Natal city. They might not be broken; they are just stopped.

Do you remember the “waterfront de-luxe scam” on the upper part of Roberto Freire that was going to be linked to the Orla of Ponta Negra by an illegal tunnel ?
Do you know how many lawyers are working on this case?

But this is peanuts compared to was is around the corner: another huge project with a funny name situated North of Natal, with plenty of down-payments and a lot of due-diligence Sh***, is in the line of fire of their bankers.
Soon they are going to file for bankruptcy. You will see.

Remember what I said in the very beginning of this thread.

Quote #############
No Gamblers read this:
do not buy anything just to get a rent, buy an apartment only as a long term investment and only if you like spending holidays in Brazil. You may cover expenses by renting to colleagues and friends, but do not count on it as a part of your budget.
Buy something that exists and can be valued and assessed.
Or, taking a risk, buy “off plan” ( “na planta”) only in major cities carefully selecting the project and only if this aims at Brazilians. Do not believe any mumbo jumbo guaranteeing rental income. ################### UNQUOTE

 

[Sao P]

Dear Forum members,

I have been reading this forum for a few weeks now and have found it intersting and extremely funny at times. Especially the gringos that por money into they have never seen. Very Bizarre.

What I am curious to know is... what evaluation method is being used to calculate these apparent double digit price appreciations for land plots on the beach, or just off the beach, in Natal / Fortaleza ? I have not seen any posts from Gringos who have sold out yet and made all this cash. Or maybe I have missed them. Please correct me if I am wrong, but from all I have read, it looks to me that this so called "appreciation in prices" is in some sort of "secondary property market" which is principally sales to foreingers. The "realistic market" being whats sold at prices to non - gringos.

I would love it if someone could contuct an experiment with one of these so called "highly appreciated plots. Put one on the "open domestic market", for that high price you think its worth now, and tell us how successful you were in selling it. How long did it take to sell ? What price did you get ? What type of person did you sell it to ?

 

[michaelbush]

Yes São P - you are absolutely right. The sellers for many of these lands make claims of valuations increasing 100% plus in a short period, and n0ne can substantiate with actual sales. Of course they are actually the ones getting these mega profits, selling to internet buyers who cannot be bothered to actually come to Brazil to check the real prices. Practically all the sales of plots to gringos are at prices that while looking cheap are at a high multiple of the actual value. People will wait years to get the promised returns. Most are also claiming to beachfront and are in a wilderness with nothing in front but are a good distance from the beach, more than people would like to walk, in a high temperature, high humidity climate. When you check Google images you can see they are not "beachfront" and are worth only what locals would pay for them. How many peope are cheated in this way is a disgrace, but when people will believe the lies on websites without checking, then frankly they deserve to lose their hard earned cash! " prices will rise 8% per month until the end of the year" - what a load of cr*p!!