Blindness and stupidity when investing in Brazil

[surfingbrazil]

Hello everyone

JM., I am not changing subjects and I know perfectly well how to get from Madrid to Fortaleza, where I have been several times.
Anyway, your computer generated pages full of options are for the most ridiculous routes based in the “code share” and “airline alliances” effect, since TAP has virtually a monopolistic situation.

Michelbush, the flight from Madrid you are referring to was 490 + taxes, but only for 1 week.
Cheap indeed, about 40% discount (another proof of weak demand, don’t you think)

But this is not the issue.
The fact that I mentioned the lack of interest or demand for the MAD-FOR flight after Air Madrid dropped it is simply another warning that there is not as much demand as REAL ESTATE AGENTS SELLING OFF PLAN want it.
By the way, since Michelbush mentioned Club de Vacaciones, they dropped the Barcelona – Natal flight about 2 years ago; again a proof of lack of demand.

This is line with the “Natal Airport issue”.
I repeat it for the record: There is nothing wrong with the Augusto Severo Int. Airport in Natal and for sure it is not saturated, as my figures and calculations in previous post shows.

Only persons with direct interest in the off-plan development in the Brazilian Northeast may pretend that there are not more tourists there now because of the impossibility to cope with more arrivals at the airports….. but …”abracadabra “ “ with the new airport of Natal the hordes of tourist will arrive at once and all the projects will be fully booked for years to come”.
This is scam that reminds me the worst timesharing scams.

You want more alarming proofs of this bull**** ?

Here is one:
Praia de Buzios, 20 Km South of Ponta Negra (Natal). There you have 3 nice Norwegian Resort, newly built staying empty for most of the year.
And when I say empty I mean it: no one but the guards.

Does it means Buzios is a wrong investment? Certainly not!
In fact many well-off Brazilians have summerhouses there and there is already a basic (very basic, for European standards) infrastructure there.
If somebody likes a beautiful and quiet beach very closed to Natal for spending holidays it is a perfect option.
It is probably a very good long-term investment, if the price is right.
But if he or she expects to get any decent income by renting, better forget it because it is not going to happen any time soon, regardless of the stupid expectations some agents have.

And this brings us back to the very first post of “blindness and stupidity when investing in Brazil”: off-plan projects in Northeastern Brazil are for gamblers and an unnecessary option for the average investor. This is a very risky option and very overpriced in my opinion.

There are plenty of offers in the re-sale market; many totally new ready to move in.

And about my sources, JM, just wait and you will get the confirmation in due time: this season did not start well.
Moreover, about your statement “fewer foreign tourist in 2007 but they spend more” is another irrelevant comment of yours. Of course the must spend more due to the rise in value of the Brazilian Real against all major currencies!

 

[Golfingworld]

Surfing, you make me feel like a conservative understated person...well done, couldn't agree more with with you say. The off plan industry is grinding to a halt worldwide, as it only works when prices are likely to rise. When there is stagnation nobody needs to buy a plan now as in 2/5 years time it will cost the same or less. So, buy what is finished or resaled as you suggest and if you want to buy for profit buy gold or antiques. Certainly the realisation is now creeping in and this should bring back reality into pricing rather than the "over-inflated" model that the off plan industry needs to work with.
Not only that but those who bought off plan and borrowed on interest only loans will create the next sub prime crisis in Europe when they cant sell and get back their original outlay (let alone any profit). There are thousands like this in Iberia already.

 

[michaelbush]

Thank you Surfing. Until yesterday I would have agreed, and indeed have posted many times that the old airpport does not appear to have reached anything like capacity for arrivals. However, following a discussion with a friend who had spoken to management at Thomsons, I now believe that the situation is somewhat different. Thomsons will not be flying this winter, to Natal, and this is not because of lack of demand, for flights, more the contrary. The problem is they cannot get the arrival slots allocated. They wanted more, not less! They provided a fair proportion of flight only seats, and wanted to increase the number of flights per week. I can only assume there is some political agenda.

.

 

[michaelbush]

However even if Thomsons did have more slots, it would never be sufficient to service the number of seats needed for the size resorts at Cabo São Roque and Grand Natal. If we are talking holiday resorts, with 45000 homes, (90000 heads minimum with 2 weekly changes?) and with average 350 seats per plane, there would need to be a massive increase in the number of flights!!

I believe the old airport is also used by the airforce planes, how many per day I do not know.

All this reinforces exactly what I have been saying for a long time- the best investments here are in property that can be sold or rented to Brasilians

 

[Golfingworld]

I find it hard to believe that as Thomson cannot get more slots in Natal they are pulling out, this doesn't make sense. If they wanted another flight but couldn't get it why would they cancel their entire programme...most airlines want to hang on to slots not lose them. Just by this years Thomson pricing you can see that they can fill their one flight weekly from the UK as there are no offers like last year, or very few...so why abandon that altogether? If I was of a cynical nature (as if) I would say that there is a hidden agenda here..maybe as they have just merged/bought First Choice who major on Bahia/Costa de Saiupe seemingly more effectively and also as the 12 or so 787's that they expected on stream for this winter will not be on stream now....so maybe they need to borrow some of Thomson's 30 year old 767's?

Whatever the reason, once again it shows that Natal is not exactly booming and defies the argument that when all these people will go there the flights will come.

 

[robh]

Thank you Surfing. Until yesterday I would have agreed, and indeed have posted many times that the old airpport does not appear to have reached anything like capacity for arrivals. However, following a discussion with a friend who had spoken to management at Thomsons, I now believe that the situation is somewhat different. Thomsons will not be flying this winter, to Natal, and this is not because of lack of demand, for flights, more the contrary. The problem is they cannot get the arrival slots allocated. They wanted more, not less! They provided a fair proportion of flight only seats, and wanted to increase the number of flights per week. I can only assume there is some political agenda.

.

I had a discussion with a friend who works at their head office (in management) and they said there are no plans to pull out at all. The only real decision being made is whether the plane is branded ThomsonFly or First Choice.

 

[Golfingworld]

If you go into the Thomson Fly website and look at the timetables for Natal, no flights are shown after April 2008. One could say that they aven't sorted their winter schedules yet, but if you look at Dominican Republic you can book right up to April 2009! So this is suspicious I must say.

 

[robh]

If you go into the Thomson Fly website and look at the timetables for Natal, no flights are shown after April 2008. One could say that they aven't sorted their winter schedules yet, but if you look at Dominican Republic you can book right up to April 2009! So this is suspicious I must say.

It has been like that every year for the last 3 years.

 

[JMBroad]

And about my sources, JM, just wait and you will get the confirmation in due time: this season did not start well.
Moreover, about your statement “fewer foreign tourist in 2007 but they spend more” is another irrelevant comment of yours. Of course the must spend more due to the rise in value of the Brazilian Real against all major currencies!

I am eagerly awaiting news regarding the condition of the tourism market as that will be very relevant to all of us.

Actually, the currency has absolutely nothing to do with it. Quite the opposite in fact - as the Real gains strength you would expect people to spend less as things are now more expensive "to them". However the two major indicators of tourism are tourism arrivals and tourism revenue. One is pointless to analyse without the other, as I am sure you are aware.

Regarding your "earlier calculations" which "prove" that the airport is at max capacity, your calculations were all wrong as I "proved" and simply repeating "oh yes they are" seems a bit childish to me.

Exactly what were you agreeing with GW? His negativity?

 

[Golfingworld]

Actually Mr Broad, people spend less as their money doesn't go so far or they don't go there again as it is not as cheap as previously. Maybe their holiday costs more as the operators have to pay more for the hotels due to exchange rate..how can you say currency has nothing to do with it? Currency has everything to do with it. Whether you are righ or not about thei airport in Natal (I think you are living in cloud cuckoo land) they won't have a problem next year of Thomson pull out..at least it will give them time to prepare for the massive boom of golfers that will arive in 5 years time! This whole Brazil fantasy is now coming home to roost to be honest.

 

[JMBroad]

Actually Mr Broad, people spend less as their money doesn't go so far or they don't go there again as it is not as cheap as previously. Maybe their holiday costs more as the operators have to pay more for the hotels due to exchange rate..how can you say currency has nothing to do with it? Currency has everything to do with it. Whether you are righ or not about thei airport in Natal (I think you are living in cloud cuckoo land) they won't have a problem next year of Thomson pull out..at least it will give them time to prepare for the massive boom of golfers that will arive in 5 years time! This whole Brazil fantasy is now coming home to roost to be honest.

This just totally proves my point that you don't read what I write and just invent things yourself then assume I said it.

If you read the posts again you'll notice that YOU agreed with Surfing who said that people would spend MORE because of the exchange rate. I corrected you both by saying they would spend less - now you are telling me I'm wrong, they won't spend more?

So: they won't spend more = they will spend less = you agreed with someone who said they would spend more and disagreed with someone who said they would spend less yet you know for a fact they would spend less...

I'll ask my question once again: What exactly were you agreeing with? His negativity? Because you obviously don't agree with his logic...

I agree, one of us is living in Cloud Cuckoo Land. Whats the weather like up there anyway and how are the flight connections?

 

[oregon woodsmoke]

Back to the very original post, I do not read the message as 'do not invest in Brazil"

The message was not to invest in Brazil, or any foreign country, without first investigating exactly what you are buying.

Also, do not invest in any foreign country without learning how real estate transfers are recorded and what the basic tax structure is regarding real estate.

Remember that the real estate salesman is trying to sell you something. He is going to paint you a rosy picture and neglect to tell you of any negatives. That's his job as a salesman. Your job as an investor is to double check all the information.

 

[surfingbrazil]

I am eagerly awaiting news regarding the condition of the tourism market as that will be very relevant to all of us.

Actually, the currency has absolutely nothing to do with it. Quite the opposite in fact - as the Real gains strength you would expect people to spend less as things are now more expensive "to them". However the two major indicators of tourism are tourism arrivals and tourism revenue. One is pointless to analyse without the other, as I am sure you are aware.

Regarding your "earlier calculations" which "prove" that the airport is at max capacity, your calculations were all wrong as I "proved" and simply repeating "oh yes they are" seems a bit childish to me.

Exactly what were you agreeing with GW? His negativity?

Mister JM, you are really a joke, an arrogant joke !

You answer hundreds of posts, know about sewage, toilets, roasted nuts , capacity at airports…. You know everything…. And now ECONOMICS !

Why do you waste your time here? , Call the FED and the ECB and give them a hand. The might need it these days.

Confronted with higher prices in Brazil, maybe some perturbed illuminated no-no will prefer to stay wak*** in the hotel room but the vast majority of rational tourists will simply do as the used to ( latinas, taxi, forró & samba, caipirinhas, buggy & picanha…. ) and the will end up using more Euros or USD or whatever they are bringing, not because their wish to contribute to the Brazilian GDP, but because all their expenses that used to cost 100 now cost 125.

Give me a break ! What kind of off-plan are you selling , by the way ?


AND NOW FRESH INFO FOR Michelbush & Robh from Pipa:

Club the Vacaciones / Air Comet stops flying Madrid – Natal 30 March 2008 and will not re-start before July 2008.
Yet another sign of weak demand ( except for JM, according to him is due to the saturation of the Airport , of course )

You see I am very well informed

 

[Golfingworld]

It seems to me that surfing is one of the few on here like me that isn't living a delusion but there again maybe like me he is not trying to sell something and so his judgement is not impaired!

 

[Golfingworld]

Talking of roasting I see UB40 (or is that a reggae band) got quite a roasting on Gringos dot com! When will you Agents all just realise that the general (investing) public are not stupid and that the more propaganda you put over the less credibility you have. Has it occured to you that if there is a modicum of reason and common sense to your propaganda then you might actually gain people's confidence and sell something?

 

[JMBroad]

What propaganda? I mean this is getting to the point of ridiculous now. The pair of you do nothing but bash agents even though you can't make a coherent point between you, it appears your sole purpose is to contradict anything anyone says on here which may be of interest to investors.

So far neither of you have been able to prove one single iota of what either of you have said here over the past many months and have never been able to prove what I say as wrong or misinformation. I have listed numerous times and on numerous posts information which you are both giving which is not only wrong, but misleading and often simply because you don't even read the posts you are replying to.

For me, I've had enough. It's like arguing with children. Unless some action is taken whereby people have to at least provide some kind of reasonable credible evidence (or at the bare minimum justify their claims) for what they say I see no point to participating.

 

[Golfingworld]

We bash you because most of what you say about this wonderful "emerging market" of Brazil is complete nonsense. Most of you sit there in Spain, where you can't sell anything anymore because you over cooked that market and now you try to convince poor unsuspecting novices that the new Klondike is in NE Brazil. There are now less flights to Brazil, they are more expensive, The Reis has risen 20% against sterling and also against the Euro etc etc all of which entirely contradict the propaganda that comes out of Malaga about Brazil. I have utmost respect for those on the ground in Brazil doing it for themselves and no respect for those in Europe who try to convince me that a new bridge, a new airport and cheap flights that don't exist will make me my fortune in 10 years time. Just as anyone with any sense would not invest in mega projects with more golf than Pebble Beach, a training camp better than Man Utd built alongside millionaires villas that as jet are grey unpainted breeze block house currently occupied by fishermen! That's why you get roasted my friends. Not to mention the fact that they will have to dispose of their own refuse and flush their toilets with a bucket.

 

[JMBroad]

We bash you because most of what you say about this wonderful "emerging market" of Brazil is complete nonsense. Most of you sit there in Spain, where you can't sell anything anymore because you over cooked that market and now you try to convince poor unsuspecting novices that the new Klondike is in NE Brazil. There are now less flights to Brazil, they are more expensive, The Reis has risen 20% against sterling and also against the Euro etc etc all of which entirely contradict the propaganda that comes out of Malaga about Brazil. I have utmost respect for those on the ground in Brazil doing it for themselves and no respect for those in Europe who try to convince me that a new bridge, a new airport and cheap flights that don't exist will make me my fortune in 10 years time. Just as anyone with any sense would not invest in mega projects with more golf than Pebble Beach, a training camp better than Man Utd built alongside millionaires villas that as jet are grey unpainted breeze block house currently occupied by fishermen! That's why you get roasted my friends. Not to mention the fact that they will have to dispose of their own refuse and flush their toilets with a bucket.

Most of what I say is nonsense, yet you have yet to prove me wrong on a single point.

Yet again you are saying that I am trying to convince you that a new bridge, new airport and cheap flights will make you millions yet never have I said this.

What I have said is that the new bridge makes life easier for those living in Natal (which it does) while you say it is pointless and leads nowhere. The people "on the ground" which you admire also told you that you are wrong and the bridge makes life easier, agreeing with me and proving you wrong yet again.

I've said I believe the new airport will be built, you say it won't. The people on the ground which you admire also agree with me that it will be built, so once again where am I wrong?

You infer that I am selling GNG yet find a single post where I promote it or even say that I would buy there. I stated when it was first launched that although it may be very interesting and I know people who have bought there and people who sell there, I would personally never buy there because it's too big for me.

Not everyone's idea of an investment property is a half built dodgy apartment which may well be illegal in the middle of Ponta Negra surrounded by brothels and bars.

So basically once again all the reasons you give for me being "the bad guy" are totally ficticious.

 

[JMBroad]

Mister JM, you are really a joke, an arrogant joke !

You answer hundreds of posts, know about sewage, toilets, roasted nuts , capacity at airports…. You know everything…. And now ECONOMICS !

As mentioned earlier, I worked for many years in hospitality and tourism, from managing large international city centre hotels to golf course resorts to a chain of travel agencies.

In my youth before starting in tourism, I studied Environmental Ecology for 2 years before cutting my hair and deciding to get a job which actually made me some money.

Yes, I know how to add. Forgive me for having an education.

 

[Golfingworld]

Brothels and Bars, great stuff that will help to double the value with all those Italians in town! At least someone knows where to pick a spot where prices are rising. Is "half built dodgy apartment" a technical term used by Estate Agents in a fluster because they are not selling much of their "attractively positioned, conveniently located, spacious, bijou apartments" off plan?