Property Brasil - Price Variation Index

Discussion in 'Brazil Property' started by Norbert, Mar 25, 2013.

  1. LoneRanger

    LoneRanger Guest

    Now I'm sure you only give your opinion , not the facts.
    Your wishful thinking, just that.
    Lost local politician talk, to keep you dreaming..
    (In 2050) they will be back etc. (including a hugh refinary maybe ?)
    I know the facts, sorry.
    Brazil knows the facts.
     
  2. Joachim

    Joachim New Member

    So according to Lone Ranger, is that Rio Grande do Norte is doomed to extreme poverty, high unemployment rates and crime due to a non-existant economy? Is the new airport with it's free trade zones not supposed to be the economy stimulant for the city of Natal, like the oil and salt is for Mossoro? Kind of a cargo hub for Brazilian air freight between other countries? At least, that is how I understood it. What the port does to Recife, this airport would eventually provide for Natal. Similar what the port does to Rotterdam and Schiphol does to Amsterdam, as a rough reference.

    I am worried though of the lack (or inactivity) of investment the local government does in infra-structure despite receiving money from the federal government to execute them. Also, the lack of incentives for larger businesses to open their branches here apart from some textile companies. RN needs to focus on how to attract more businesses into the region and I think the free trade zones are crucial, especially as they could produce and import cheaper than in other states if done correctly. Or specialize in one sector like a Brazilian silicon valley (attracted to the good weather, incentives etc.) or these free trade zones would incorporate local produces that need to be shipped quickly (like fish, fruit and other perishable goods).

    It is a shame because geographically and climate wise, Natal has the potential to be a robust city with tourism, industry and commodities and not suffering so much with very big city social problems like Sao Paulo, RJ, Recife etc.
     
    Last edited: Apr 6, 2013
  3. LoneRanger

    LoneRanger Guest

    I liked your post, but cannot agree with several things.
    Think this is caused by;

    Brazil is older than 6 years, and unfortunatly, history (economy) is repeating again. It's clear to see that we are on a dangerous way.
    Just look what happend with the financial housing system in the late 80's early 90's.
    The SFH/BNH system. I'm sure things like this will happen again.
    The unbelievable government measures to keep the economy (the dream) going on.
    To keep consumption "lubricated".
    Financing consumption, burning the badly needed tax money.
    Thinking during 4 years only of the "next elections".

    I'm not saying the NE is doomed to poverty etc.
    I'm just trying to explain that there is no "Boom" anymore. (if there ever was one)
    And in my opinion things will go downhill.
    Some places in the NE will be hit harder than other places in Brazil.

    I think you know the story of Mr. Eike Batista and his "X" companies.
    Specialy the "OGX".
    In 2009/2010 when this hype basicly started, on my job we (some of us) came quick to the conclusion that this all was hype, a financial sandcastle.
    We were condemned to fools & idiots.
    But for us it was clear that this was financial pyramid, a Ponzi scheme.
    The financial markets, Brazil but specialy worldwide, believed in Mr. Batista, they put tens of billions of US$ in his companies. He became (local and internationaly) a financial wonder.
    Some of my collegues and me were declared insane.
    Mr. Batista became the 5th (or so) richest man in the world (Forbes).
    He declared that he would be the richest man in the world in a few years.
    Everybody was promoting him and his companies, the press, the people, the government, the international banks and invest.funds. Lula's big friend, Brazils heroe.
    Than......
    It all collapsed. ( despencou or desmoronou).
    The last 2.1/2 years his stocks plunged 92%.
    Yes, now the stocks are worth only 8% of their value in sept 2010.
    This week he lost more than 20%.
    Some US$ 30 billion or more evaporated.
    The owner ?
    You can't find him on the 100-richest Forbes list anymore.
    So, were we wrong ? Was it a sandcastle ?
    Where in the world have you seen something like this ?
    Mr. Bernard Madoff maybe, or earlier Bernie Kornfeld.

    This is Brazil.
    Yes, I agree, one must have a deep knowledge of the Brazilian laws, but also Brazil's history and the actual political and financial "conjuntura".

    I totaly agree with this:

    I disagree with this:

    This should not happen, most people haven't the money for a second "BET" !!
     
    Last edited by a moderator: Apr 6, 2013
  4. debzor

    debzor New Member

    My intention was not to be critical of anyone who has lost money through an investment, and I want only to talk from my personal experience, hence the time frame.

    Investing in anything is a risky business, but with potential rewards, which is why we do it. If you invest in a company on the stock market that is about to launch a sensational new product, then you can expect to make an excellent return. If that product fails to materialise, then you are going to lose money - that is the gamble. If you wait until after the launch, then you will be too late.

    If, on the other hand you give your money to a 'nice guy you met down the pub', in the belief he will invest wisely for you, then your chances of that excellent return may be much reduced. This is called due diligence.

    All markets are cyclical, and all investors want to buy when it is down and sell when it is up. A wise and well informed investor will use all the information he has to hand to predict these trends, hopefully successfully. Everyone has an opinion about when these highs and lows may occur, which can clearly be seen in forums such as this. Some people will be "bulls", others "bears".

    It is also much easier, with the benefit of hindsight, to advise that someone should have bought at this time, or sold at that time. But if we all had this information then we would all be millionaires, and we would not seek the advise of others in forums like this!
     
  5. Algarve

    Algarve New Member

    Get back to basics

    Let me get back to basics. Investments are taken by people who want to get some profit. Money for investments should not come from banks. For every penny you ask to a bank you will pay three. In simple words - you invest the money you saved. Brazil as well as Portugal, Spain, Greece, Italy and now Cyprus have grown due to bank money not saved money. Any nation needs some "foreign money" to grow but cannot do it solely on that. Right now, foreign investments in Brasil are decreasing at a very high rate, almost as high as it was when the money was coming in. This is a fact and this data is needed to calculate risk. So risk is now high. If risk is high how can you or anybody believe in such investments like the new airport and the new port in Natal. Just because you have the money to build a huge airport that doesn't mean you automatically attract new investments to the area and this is true in Spain with some new airports such as Ciudad Real in Castile-La Mancha, Castellón-Costa Azahar Airport in Valencia, Huesca airport and in Portugal with the new and empty Beja Airport in Alentejo. All these white-elephants were only possible because de valuators work was redone by lawyers and politians. Now, ask yourself why a young man chooses to go to college to get a degree in Law or political science. The answer is simple - the young man hates math. Simple isn't it!!!! Most decisions to go ahead with white-elephants projects are done on the political table and so the numbers and the risk is put to the side. You only have the need for a big airport if there are a lot of new companies in the area asking for it. You should never do it to attract new companies. In simple words - There's no need of a new bataclan where you have no clients, even hookers now that. So let's get back to the basics and try to keep the ideias simple. When I see a lot of people giving me a lot of excuses to try to show me the way to a profit, I tend to go other ways looking for hard evidence, asking people around, gathering my own data and that is the best way to find good investments. Never rely on politians and lawyers. Their opinions are important to them and to people who elect them, not to investors. (sorry for my poor english):hmmmm2::hmmmm2:

    My father worked as a civil engineer in Brasil between 75 and 83. He once said to a brasilian President, in 1980, that Brasil was going to have a lot of problems with debt in the near future because brasilian politians were building roads to nowhere, usinas hidroelétricas for no factories, ports to ship pordutcs to no foreign clients. He was the engineer responsible for the project and building of the Estrada de Ferro Carajás for a company called Promon Engenharia. He told Figueiredo to invest only in such projects as Carajás and to stop with the Transamazónica and similar projects that were going nowhere. But history tells us a different story, a story of money wasting to please some elites. And this type of behavior is on the political agenda again. But as you know the political agenda has nothing to do with the realstate agenda unless if you are building the white elephants.


     
  6. LoneRanger

    LoneRanger Guest

    That's the problem.
    Again this hype.
    Isn't it the obligation of any government to improve infrastructure ?
    Here it seems (the last decade) that we must fall on our knees and thank the government for it.
    What "major infrastructure project auctions" again ?
    How about the "PAC 1 &2" ?
    They can't even finish these project (if ever started).
    Again dozens of "Trans-Amazonicas".
    The Norte-Sul railroad, the "Transposição do Rio São Francisco" river.
    And...and...and....
    If they ever finish it, it have cost us 300-400% more than estimated.
    A "Bullet-Train" from Rio to SP to Campinas ?
    Just a few hugh construction companies rule Brazil. (donations to election campaigns).
    Sorry, I see the same as we have seen before (yes Figueiredo/Geisel etc).
    But at that time we had good economists like Mario H. Simonsen or people with good view (Roberto Campos). Even Delfim Neto.
    Worse was Sarney, our default.
    But it looks worse to me know, because to me it seems there is no logic strategy to fix our problems. What problems ?
    Inflation, economical grow, education, healthcare .....................................
    The clock is being turned back, they want every thing "State" again.

    The last decade Brasil could surf on the international financial wave.
    That's over, but nobody prepared us for that.
    It was just partying and self promotion.
    FHC changed this country for better.
    I think it's all thrown away.
    Back to the past.

    Brazil has no national strategy.
    Every state just thinks of themselves.
    No national coordination at all.
    Some governor thinks he need a hugh airport or port (the world needs it), he just constructs it. Looking for votes.
    The money ?
    Lending with the BNDES, worldbank, these half-a-dozen construction companies are always here to help (elections).

    Did the NE needed ports like PECEM and SUAPE.
    NO.
    Both were projected as beeing hub-port to Europe or Asia.
    In the late 90's I had a subscription to the (paper) Gazetta Mercantil.
    (My "boss" payed it, and was glad to see I was reading it during working time)
    The sentence of specialist was already at that time, both ports never will be a hub-port.
    And now, they aren't.

    Back to the eternal "Country of the Future".
     
    Last edited by a moderator: Apr 6, 2013
  7. debzor

    debzor New Member

    Actually SUAPE has been hugely successful. So much so, that it has already outgrown its original allocated area and they are now looking at other locations to expand and build into. I cannot comment on the other projects you mentioned.
     
  8. LoneRanger

    LoneRanger Guest

    SUAPE (& PECEM) were projected in the 90's to become a hub port for containers in Brazil. Because of their "strategic" location on the South Atlantic map.
    Big "Emma Maersk" like, 14.000 TEU container ships coming from (or going to) Europe or Asia (to big for the Suez channel), didn't have to spend any extra fuel going to Santos, Rio, Vitoria or Paranagua etc.
    The natural, most economic way would be: Go to SUAPE (or PECEM), dropped your containers there and follow your way.
    You will burn less fuel.
    This is what the local governments of PE and CE figured out (math's ?).
    Like this so called hugh airport hub in Natal.
    But the companies (like Maersk, P&O, Nedlloyd) didn't believe in this (math's ?).
    They made this clear before construction of these ports.
    Dropping 10.000 containers in the NE of wich 9,950 have to go to the south ?
    Madne3ss isn't it.
    Evenso, both states, CE and PE, build there ports, each promissiong the population that their port would become the "main hub" to Europe or Asia.
    How important are we, give us your votes.
    So 2 ports were build, were there wasn't even space for one.

    Yes, you are right, PECEM and SUAPE found other ways.
    And they should. The development of the NE needs that.
    Industrial areas.
    Brazil needs that.
    Fortaleza will get some steel industry and a refinery I hope.
    Recife... Well, the (where is he) Hugo Chavez "Abreu & Lima" refinery and more (I hope).

    Pls don't mention the Atlantico-Sul shipyard.
    And their first build tanker "Joao Candido", let's forget that.
    Brazil needs GOOD shipyards north of Rio.
    Between Rio and lets say Curação or south of USA there are no significant shipyards.
    But, again, there is no national strategy for developing the NE (and the rest of Brazil).
    Every state is just thinking of themselve.
    Money (big money) is thrown away building twice a big port in a 500 km range, when we only need one. Or not even one.
     
  9. Joachim

    Joachim New Member

    Although I understand where you are coming from concerning politicians and totally agree that this is the main driving force for any government project at least in RN. Obviously, there needs to be economic activity to justify bigger airports like the one they are planning to do in Sao Goncalo and that is the reason why those free trade zones are so important (at least to my understanding). Natal needs to start somewhere otherwise it will remain unattractive for business to settle here. The recent Dubai started, worried about their oil reserves drying up, with a free trade center that initiated the commerce and trade followed by infrastructure investments eventually resulting into the tourism and service economy they craved for as an alternative revenue.
    source: How Did They Make the Dream Called Dubai a Reality

    Like I mentioned earlier, that is why I am so disappointed in lack of investment on the infrastructure side, which includes their tourism (which should be the main focus now).

    Reading Lone Ranger and Algarve experiences on Brazil, its seems they never learn from the past. Why is that? I hope to me proven wrong because for me the NE of Brazil has so many great natural attributes and general lifestyle.







     
  10. LoneRanger

    LoneRanger Guest

    You are asking me proves and facts, statistics, I give them-ALWAYS.
    I asked you for some facts about your statements about Natal/RN, the economic situation you are mentioning.
    No answer.
    Your answer has nothing to do with my question.

    Probably your answer is one of the kind (seen before the last weeks) that gives the moderator the impression that a "childish" discussion is going on and this topic/thread has to be closed.
    Locked.
    Good for obvious reasons.

    So if you are running out of arguments !

    I honestly hope this discussion won't disappear .
     
  11. LoneRanger

    LoneRanger Guest

    This, in my case, is amazing.
    It's exactly the "PAST" , the Brazilian "past", what I tried to transmit in my posts.
    How this "past" is here again, or even worse.
    How much I learned in "my" Brazilian past.
    That's exactly what I try to transmit here.

    So, the new hype now is "A Free Trading Zone" ?
    Like the "Zona Franca de Manaus" we have fore some 40 years already ?
    Like we have now, in other places, or after that some temptations ?
    Pls explain this.

    Is this the "post" World-Cup hype ?
    Honestly, I found out that the next one will be a "Disney-Park" in the Natal area.
    What ever is a "Disney-Park".
    But a new, extra-ordinairy "free-trade-zone" hype.
    Whow....
     
    Last edited by a moderator: Apr 6, 2013
  12. Algarve

    Algarve New Member

    Trump

    Does anybody know how many times Donald Trump decided to come to Brazil and how many he really went for. As a friend of Ricardo Bellino, the man behind Trump's interests in Brazil, I know there were 3 times. The last one, in Rio de Janeiro, failed completely. It's not working for Donald nor for Thomas Kramer and they know very well why. Brazil, from the outside, looks like heaven but when independent valuators arrive in Brazil and complete their job, heaven becomes hell. The same happened in the 60s with Tomé Feteira, a portuguese billionaire who bought most of the coastline of Maricá, in the Região dos Lagos, Rio de Janeiro, and Fernanda Pires da Silva who bought a lot of plots and Islands in Angra dos Reis in the 70s. Apparently, only the brazilians are able to deal with the traditional corruption or are willing to spend a lot of time until profits come to shore. Recently I saw a project in the NE, being advertised in a shop in the Marina of Vilamoura. The the advertising campaign compared the project to Quinta do Lago in many ways, but I do not remember its name or precise location. Again, I cannot understand the reason for this type of campaign, unless Vilamoura owners were involved in this.
     
  13. Joachim

    Joachim New Member

    Yeah, I worded that wrong. I meant they in "Brazil" and not you and Algarve personally. It is worrying that Brazil does not learn from the past and am wondering why is that?

    Also, it seems the zona franca in Manuas has helped their local economy or not? Why would it not work for Natal?

    "Com a implantação da Zona Franca de Manaus na década de 1960, a cidade novamente ocupou lugar de destaque entre as mais ricas do Brasil[18]e da América Latina.[19] Ao lado de Cuiabá, capital de Mato Grosso, é a capital que mais cresceu economicamente nos últimos quarenta anos, fato explicado principalmente pela implantação e desenvolvimento da Zona Franca de Manaus,[18] que também atraiu milhares de migrantes que ocuparam de forma desordenada a periferia da cidade." source Wikipedia: http://pt.wikipedia.org/wiki/História_de_Manaus


     
    Last edited: Apr 7, 2013
  14. Joachim

    Joachim New Member

    Algarve, maybe the project in Aquiraz, Fortaleza? Dom Pedro golf resort I think is the name.
     
  15. Algarve

    Algarve New Member

    Reserva

    I remember now, the name is Reserva do Paiva, but it seems they change the initial project a little bit. This project is in Pernambuco. But another project called Casas de Sauipe looks a lot more like Quinta do Lago in terms of landscape and because it has a lake. Both projects are from Odebrecht, the same company responsible for the constrution of the Vasco da Gama Bridge is Lisbon. Apparently they learned something in Portugal in the last twenty years.
     
  16. LoneRanger

    LoneRanger Guest

    Odebrecht is one of the biggest (if not the biggest) private companies in Brazil.
    Originally a family construction company from Bahia, now they are also leaders in chemical/petrochemical industry, oil&gas, shipbuilding, mining, agro, engineering.............
    I think they taught Portugal a lesson with that bridge,
    You can find Odebrecht on every continent for years already, even building infrastructure projects in the USA for some time.
    If Odebrecht fails, Brazil has failed.
    If Odebrecht is involved in your RE development, you can sleep quiet.
    I'm pretty sure of that.
    They have a name and (existing) history.

    Odebrecht
     
    Last edited by a moderator: Apr 7, 2013
  17. LoneRanger

    LoneRanger Guest

    A "Zona Franca" or Free Trade Zone like in Manaus will never happen in Natal or where ever.
    This has to be aproved by the Federal government (Camara+Senado+President).
    This will NEVER happen.
    So forget this idea.
    The "Zona Franca de Manaus" started 50 years ago.
    If it was now, it wouldn't be there.
     
    Last edited by a moderator: Apr 7, 2013
  18. debzor

    debzor New Member

    For the uninitiated, I think the Brazilian property market can be broadly split into 3 categories:

    1/ Simple housing. Epitomised by the Minha Casa Minha Vida programme, designed to get the very poorest out of favelas and illegal houses, and on to the property ladder by way of government backed loans and subsidies. There are many price level tiers, and MCMV has been fraught with problems since it started - particularly in the lower price brackets, but there have been some success stories. There are strict rules and regulations, so investors need to be 100% up to speed in all aspects of MCMV before even considering this option.

    2/ Primary housing. Typically apartments in cities, but also some houses, to be used as a primary place of residence this is where the newly-emerging bank mortgage market features strongly. You do need a substantial deposit to qualify for a mortgage, and the interest rates are not cheap compared to other countries. This market is where the big constructors race to compete with each other, a lot of them aiming at first time buyers, and there can be a danger of oversupply in some areas - although this may mean better deals can be had. Any bank supplied information will be primarily influenced by this market sector, and it also begs the question - if people are buying rather than renting, will this diminish the rental market in these cities?

    3/ Holiday homes/second homes. In the beach towns or in the countryside around the cities, it is common for the wealthier to have second or holiday homes here, where they can get away for weekends and holidays. The mortgage market is much smaller here, as most buyers have sufficient funds to purchase outright. Those that cannot afford to buy, rent. A lot of foreigners seem to be attracted to purchasing in these areas, or investing in land that may eventually increase in value. However the Brazilian market will always determine price trends as it is far larger - so buy where Brazilians are buying.

    It also occurs to me that there are foreign investors who are not that interested in short term gains, but a lifestyle choice (holiday home on the beach, city life, etc), with eventual capital gains over a longer period. Some rental income might be nice, but is not absolutely necessary, and Brazil is full of options for them.
     
  19. LoneRanger

    LoneRanger Guest

    Back to the subject.
    Price evaluation of realestate.
    This graph shows the yearly evaluation according the CentralBank(IVG-R) and the FIPE/ZAP.

    [​IMG]

    The IVG-R = 3% now, and the FIPE/ZAP (asking prices) some 8%.
    Still dropping or falling or crashing.
    Inflation is more than 6% /year and is rising.
    On a simple bank savings account (poupança) you get some 7,5% a year.
    Brazilians don't have the money for a mortgage anymore, they are not willing to pay a fortune during 30-35 years for something they know it's not worth 50% of its actual value.
    Although historically the rent prices were always some 0,8-1,0% of the property value (p/m), now the rent price isn't even 0,4%.

    So what will an investor do ?
     
  20. Murfster

    Murfster Member

    Your graph is showing that the rate of growth is falling...that's a world of difference from a crash surely?
     
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