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Credit Crunch, price declines and bankruptcies...where are the profits in Property?

Discussion in 'Brazil Property' started by Golfingworld, Apr 14, 2008.

  1. Golfingworld

    Golfingworld New Member

    It seems to me that it has all come home to roost..if anyone still wants to invest abroad in off plan property just ask yourself the point if prices are dropping! Why not wait for them to be finished and buy at a lower price than today?
     
  2. Dotty

    Dotty Banned

    you did mention............

    Absolutely.Having looked through various webpages ,companies are still advertising companies that are having major difficulties or no longer exist .What would an investor do in such situations GW?I do agree with buying off plan ,but only and I mean only with reputable companies(who are normally Brasilian) I am really afraid to invest with an overseas non-living,non speaking,unknowledgable overseas developer and a non Brasilain resident.
     
  3. JMBroad

    JMBroad New Member

    Hehehe

    Well, Dotty and Dottette.

    Once again the claim that prices are dropping. I've still seen no evidence of this anywhere apart from GW's claim that the developer of the apartment he bought gave him a discount.

    Just to sum up both of your posts from the past few days as well as many others who you agree with - correct me if I misunderstood any of what you seem to agree with:

    <disclaimer - not my opinion>

    Only trust Brasilian real estate agencies as they are the only ones who know what they are doing. (even though the vast majority of real estate agencies operating in Brasil are doing so ilegally without the required CRECI license). Brasilian real estate agencies on the ground in Brasil are the only ones who know what is going on. But on the other hand watch out because all Brasilians are out to stab you in the back and steal your money and rip you off because they increase the prices tenfold to "Gringos".

    Isn't that a bit of a Catch 22?

    Dotty, how come none of the specialised Brasilian agents you know could advise you what is happening at LDC? You've been posting on here for days now trying to know what is going on with that development and from what I can see it would take a European agent to inform you.

    I do agree that if you do a google search you can find some horrendous websites by International agencies promoting everything including non-licensed and illegal builds. But telling them to go with a Brasilian agency instead when they don't speak the language doesn't make much sense either. Especially after everyone living in Brasil gives reports of how they are getting ripped off.

    So, what's the solution you'd suggest? Just stop investing and start putting your money under the matress again?
     
  4. Dotty

    Dotty Banned

    Hi Jim,
    Not too sure if you are aware,but from your posting maybe not !Have you actually been and seen what is going up in Natal right now?You will now already be able to see that the value off plan to the value off plan 6 mths ago are already showing slow increases in prices.Sorry about that .You are also seeing a slower pace of buying and that is a fact and what you are also seeing as quoted in a previous posting much better deals .Foe example:I have a company that calls me 2 times a week and they launched a fabulous
    resort over a yr ago (I am a client )This company would never need to have called a client ,people would just buy from they off plan with great results(past)and today they are offering those same properties at the same asking price in 2007! I am still tempted,but there will not be much gap left fro prices.That is why Forteleza is cheaper now,becasue yrs ago it was espensive,too much to choose from and then bang,prices down .So I do know what I am talking about.However ,you have your opinion and believe as you feel free.Now as for LDC ,in a recent posting I had said that an English gentleman had wanted to buy a property there.So do you have any info?
     
  5. JMBroad

    JMBroad New Member

    It's John, not Jim ;)

    Quote:
    Originally Posted by Golfingworld
    It seems to me that it has all come home to roost..if anyone still wants to invest abroad in off plan property just ask yourself the point if prices are dropping! Why not wait for them to be finished and buy at a lower price than today?


    This however is quite encouraging. 24 hours ago you agreed that prices were dropping, now, 24 hours and 30 minutes later, prices are showing a slow increase. Wonder what will happen in the next 72 hours. Exciting times.

    Which development did you buy on last year who is now offering you last years prices?
     
  6. RalphJ

    RalphJ New Member

    I can speak for Aracaju and Salvador....there is absolutely no decrease in prices for lands, houses, apartments.....only increase. And in the last 18 months in Aracaju property prices have increased here significantly.
     
  7. Dotty

    Dotty Banned

    Oh so there is no point buying there either.I guesss Joao Pessoa is still the place.
     
  8. Dotty

    Dotty Banned

    Sorry decreases

    decreases ...........
     
  9. RalphJ

    RalphJ New Member

    Don't know about that Dotty, Aracaju, unlike many other places in the northeast, just recently started increasing in price. And Salvador, that place is still exploding, and in my opinion I don't see any end in sight in the near future. If one looks at all the economic statistics for northeast Brazil, he/she will see that Bahia/Salvador is heads and shoulders above the rest of the northeast in most categories, and in some equals the entire production of the rest of the entire northeast.

    Also, still cheap and numerous international flights to Salvador. Right now you can book a roundtrip flight to Salvador from England with First Choice for a little over 200 GBP.
     
  10. Dotty

    Dotty Banned

    What do you mean exploding(high prices??) Well that does not sound too smart why would you buy when prices are too high anyway,another miscalculation from Reais into sterling and what with 30% wiped of UK house prices.Frightening stuff.
     
  11. Golfingworld

    Golfingworld New Member

    That's interesting Ralph, from what I saw recently in Natal there is a near standstill in sales and prices. Of course the market is split in many different ways, but I did say "off plan developments" which always tend to be over priced, especially if it is Gringo to Gringo sales. In all seriousness, can anyone really claim that "off plan overseas properties" are still rising in price in Natal area? The reality is that Euro buyers have just about got the same exchange rate, Sterling buyers have lost 20% and Dollar buyers are better off in Dollar related markets...add to that the uncertainty of major projects due to their difficulties and my point is wait, find something finished or nearly finished as to my mind there is no chance of an increase on these developments. Or buy in the finished Brazilian market. Rental returns on these off plan will never get near town centre properties on long lease as mass tourism to natal area is not practical whilst Brazilian airports treat their tourists no better than the fruit they export.
     
    Last edited: Apr 15, 2008
  12. Dotty

    Dotty Banned

    slowly decreasing

    slowly decrease in property prices.I only sat around a table full of Brasilians on Saturday,most in the property business and guess what they all spoke about the bubble about to burst!
     
  13. PAUL-brasil

    PAUL-brasil New Member

    Totally agree, Prices rising in Bahia, Ill assume Aracuja (because Ive never been) and Ceara because its based on its more infrastructure, high tourism in both foreign AND internal market. Whats Natal based on, hype! The prices in RGD Norte have no right to be so high, in the same league as Bahia and more expensive than Ceara! With no real increase in tourism and all lack of activity of these huge developments in RGDN the property market has no where to go for the near future.
     
  14. JMBroad

    JMBroad New Member

    So where did you buy last year that are today offering you the same prices as last year Dotty?
     
  15. RalphJ

    RalphJ New Member



    Exploding...as in economy, as well as significant domestic and foreign investment.
     
  16. RalphJ

    RalphJ New Member


    As I stated, I know the Salvador and Aracaju markets very well, and my statements are accurate in respect to them.
     
  17. michaelbush

    michaelbush New Member

    In Natal I can only quote the domestic market and land prices. Houses in the urban districts of Natal have shot up in price in the last year or two, as has the cost of lands to developers. One example is a house that cost just 45000R$ last year was sold recently for R$80,000. A house in Nova Parnamirim that two years ago was R$75000 is now being sold for R$120,000 having had a small reform costing R$10,000. Land that just six months ago was 13R$ m2, is now R$18. New apartment blocks for Brasilian people do not show signs of dropping in price, at least not yet. The Brasilian economy is very strong and does not depend too much on imports, and since the credit market is not in the same league as the US or Europe, and the banks do not lend in the same reckless fashion with loan to values over 100%, the credit crunch will not have the same effect here. This is one of the reasons the currency is strong and long term I believe it will remain so.
     
  18. robh

    robh Administrator Staff Member Premium Member

    What is interesting about this "world wide slump" is that no major country is officially in recession yet. The US and UK are still growing, there is still plenty of investment money around and the banks are quickly making up for their losses on sub-prime loans by not passing on interest rate cuts to punters (I wonder how long this will last as there must be huge political pressure on the banks to do so).
     
  19. Dotty

    Dotty Banned

    I did not buy off plan last year.The prices were and still are 320,000 reais without furniture for a 2 bed lux apartment and 1.2 million reais(300,000 pounds sterling) for the for the larger apartments.I bought off plan from them 4 years and have seen fabulous returns,but the same returns no longer exist I am afraid as the prices are set way too high to begin with.
     
  20. Dotty

    Dotty Banned

    High Micheal,having just read your article I am not quite sure if I agree.Firstly the brasilian banks are at present falling over themselves to offer Brasilians money to buyers(if a little slow) but having spoken to various corretors with regards to payment plans I find it extrodinary that they will negotiate absolutely anything you throw at them because if they do not then they are left with half empty blocks.If you know all the buildings that are going up you will be able to recognize the ones who are having difficulties(normally the ones that are still incomplete after 4 yrs)Go to the justice dept the highest number of cases are non payments of cars and non payment of property,so there you go.
     
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