Should we really expect a Brazilian property boom because of the World Cup?

Discussion in 'Brazil Property' started by totallyproperty, Jun 8, 2014.

  1. totallyproperty

    totallyproperty Administrator Staff Member

    There is much focus on the Brazilian property market at this moment in time just days ahead of the FIFA World Cup. Many experts believe there will be increased support for the Brazilian real estate market in the short to medium term although others are sceptical as to whether this will continue in the longer term.

    Do you expect to see the Brazilian property market benefiting longer-term because of increased exposure created by the World Cup and the forthcoming Olympics?
     
  2. Mineiro

    Mineiro Member


    First of all the true middle classes are being destroyed by the current government. What the socialist government likes to call middle class, are people who live in a favela but own a flat screen tv, a washing machine and earn between R$291 and R$1019.

    Brazil's economy has been declining for years and is currently set to grow by 0.9% this year, while at the same time inflation is rising and is set at around 6.75% . The decline in Brazil's industrial output has been even worse. There is not one economist other than the ones working for the actual government who would say that the future looks bright.

    There has been a huge fall in the past year in the retail sector exactly because of large household debt encouraged by the lunatics who are in power. Who happen to be the same people who give out the handouts of around about R$300, which you think will somehow get these people on the property ladder.

    The US economy is set to grow by 3% in 2014 while the UK economy will grow by about 3.2% despite all your so called toxic debt. All this seems to suggest to me that perhaps Brazil probably isn't the best place to be investing in dodgy retail developments in the Northeast of Brazil which has the worst HDI values in Brazil.

    I really can't believe anyone would encourage people to invest their hard earned money in property development in Brazil.
     
    Last edited by a moderator: Aug 1, 2014
  3. Mineiro

    Mineiro Member


    This is exactly what the OECD say:

    The economy has lost its earlier momentum, even though inflation remains stubbornly above the central bank’s target mid-point of 4.5%. Tighter monetary policy, softer external demand and policy uncertainties due to the presidential election are likely to weigh on activity during 2014. In 2015, GDP growth is projected to rise somewhat, with persistent supply constraints, including a tight labour market, and the need for continued tight macroeconomic policies holding back domestic demand.

    The central bank has appropriately raised its policy rate to reduce inflation. Keeping inflation expectations anchored will require firm monetary policy action and containing officially directed credit volumes. The planned tightening of fiscal policy in 2014 needs to be implemented. With slow productivity growth, disinflation will have costs in terms of growth and unemployment, but delaying policy action would only raise those costs. Faster increase in infrastructure investment, lower trade barriers and tax reform are all needed to raise potential growth.

    Do you really think that it sounds good? Why do you insist on spouting out biased, incorrect, empty information? Do you own a great deal of property here? Do you live here? I have lived here for over 20 years and own my fair share of property in Brazil. Why would I possibly be upset if the housing market was booming? And yes I have tried to give fair and impartial information to people who do not really know the situation in Brazil. The market is falling and will continue to fall further, that unfortunately is fact. I do not sell beachside property to foreigners so I have no possible motive to change the facts. I am amazed at how someone who does not live in Brazil, can believe that he is the only one who's right.Some of the largest construction companies in Brazil, such as MRV, Rossi, Brookfield,and Gafisa who are all listed on the stock market are all in financial difficulties. Have at look at the stock prices which are at all time lows. Imagine these jerry builders in the North East who are looking for easy pickings!

    Regards Mineiro.
     
  4. Mineiro

    Mineiro Member

    By the way Rob I never asked why you moved to Spain. Good luck there!
     
  5. Mineiro

    Mineiro Member

    The OECD report supports exactly what I'm saying. Why don't you take the time to read the report properly and then read the rest of my post? I'm sorry I don't agree with you, but I thought that everyone was entitled to an opinion. Why don't you answer some of the points I make in the post without being flippant? If you had any knowledge that could contradict what I have said I'm sure you would not give such shallow answers.
    The fact that you can't seem to spell my pseudonym right, just goes to show how carefully you read other peoples' posts.
     
  6. PresidentK

    PresidentK New Member

    The latest figures show a decline in property purchases during the build up the world cup fuelling all the predictable speculation about property bubbles etc. The reality is that people were being advised to hold-off buying properties until after the world-cup and this is reflected in the figures. I am selling a house right now in Brazil and there was a sharp decline in viewings during the world cup (June/July are usually good months for property sales in Brazil); but in the last week, it is picking up again.

    Brazil still has a robust property market. The banks are still lending, the mortgage rate is still low and the minimum wage is having an impact on the economy despite all the negativity around it. When you are in Brazil, look at the cars people are driving, look at the classy restaurants that are springing up, look at what people are wearing, look at the apartments springing up, look at all the home improvements people are making. Compare this to 6 years ago and you should not be in the slightest doubt that Brazil has been on the up for over 6 years and will continue on the up - its oil and gas discoveries will see to that.
     
  7. lutjebroek

    lutjebroek New Member

    Could you, for the sake of understanding, indicate what you consider to be a LOW mortgage, and compared to WHAT.

    Also, please indicate that it is not possible for non-residents to get any loan with a Brazilian bank, and foreign banks are usually reluctant to provide one here.

    Please note, that the minimum wage is no less than 8 times lower that that in Europe, but the prices of properties are the same or even higher in some parts in Brazil.
    And you surely know that the classa medio is about 1200 reais per head, don´t you?
     
  8. PresidentK

    PresidentK New Member

    This feels like a strong point of view masqueraded as a question...
     
  9. lutjebroek

    lutjebroek New Member

    There IS a question in there, and it is a real one.

    I also have an opinion, which seems not to much different from yours, being that Brazil has much improved the last years.
    However, that is over now. Productivity has fallen past year, car sales seem to be 30% down.

    Prices of properties in Rio have seen gigantic rises, but they are now falling.

    And yes, Brazilian banks are still quite willing to loan you some money. But don´t ask the interest rates they charge (I did, it was over 20% yearly).
     
    Last edited: Aug 4, 2014
  10. PresidentK

    PresidentK New Member

    Well I think the original question was flawed (no offence to the original poster) because it was too short-termist. My personal view is that property investment is always a long term commitment and tracking month-by-month, event-by-event is simply too unnerving. When I bought my house in Brazil 6 years ago, I wish I had bought it 6 years earlier and in 6 years time people are going to be wishing they had bought now. Property investment, for me, still beats the pants off any long-term pension plan on offer or savings interest for that matter. Property investment is more than an investment in bricks and mortar, it is an investment in life-style and confidence in a country. Do I think that growth in Brazil and the correlated property market has plateaued this year? YEP I sure do. But do I think over the next 5 years the middle class will continue to expand? Yes. Do I think that the amount of people in poverty will decrease? Yes. Do I think there will be continued investment in the infrastructure of the country (whoever is in power for the next term)? Yes. Do I think that Brazil will continue to attract foreign investment? Yes. Do I think that Brazil will increase its oil and gas reserves? Oh yes. Do I think the manufacturing base will continue to grow. Yes. Do I think that the property market over the next five years will continue to be robust and offer good return on investment? Yes Sir!
     
  11. Mineiro

    Mineiro Member


    I can't believe that even on a blog for foreigners interested in buying property in Brazil, PT ( the socialist Hugo Chavez and Fidel Castro worshipping government) has their paid activists giving so-called opinions!!!! President K, I wouldn't waste any more of your time, you're not going to win over a lot of votes on this site.
     
  12. Mineiro

    Mineiro Member

    I wonder where all the experts on the Brazilian economy and housing market have gone? When they were saying that Brazils' economy would continue to grow, that the housing market was booming, and that there were huge profits to be made in buying beachside property, what were they basing their opinions on? Personal interest?
    Brazils' GDP will finsh 2015 at minus 1% according to market forecasts this year. 2016 holds very little hope either. Interest rates are set to finish at 13% in 2015. Average household debt is estimated at around 40%. Inflation looks set to reach 8% this year. Unemployment has started to rise and car sales have plummeted. The party in power have lost all political support and are involved in the largest corruption scandal ever involving Petrobras, which they have managed to turn into the most heavily indebted company in the world.
    No wonder our Brazilian experts seem to have gone on holiday.
     
  13. lutjebroek

    lutjebroek New Member

    I just reread my post of august 2014 and the reply that it was, according to PresidentK, a short term view.
    While I don´t pretend to be any expert on finances (my track record is rather bad there) I do believe lasts weeks O Globo article, stating that the housing prices in Rio and Sao Paulo haven fallen by over 20% since last year.

    I believe the so-called experts have fled. This forum seems only to contain posts of people wanting their money back. Sad.
     
    Last edited: Mar 26, 2015
  14. Mineiro

    Mineiro Member

    It is sad to note that the majority of people who invested their money in these property projects in the North East have lost their money. At least we didn't mislead as to the real state of affairs here in Brazil.
     
  15. lutjebroek

    lutjebroek New Member

  16. debzor

    debzor New Member

    Well, I am still here!

    We should not assume that a problem in one area of Brazil (no matter how large) is a reflection of the country as a whole. The country is simply too big. I believe you read Portuguese? Or copy and paste into Google translator.

    Sem queixumes e azedumes

    I have not come across one person in 8 years who has lost money, in BRL terms, where I am in NE Brazil. One size does not fit all...
     
  17. Mineiro

    Mineiro Member

    Well,well. It's wonderful how people can be so blinkered when it suits them. As you should well know, the Brazilian economy is in a dreadful situation. House prices are falling and should continue falling throughout 2015/2016. Brazil has now entered a recession that it should only start coming out of in mid 2016, if the current government continues to cut expenditure. If real house prices are falling aswell as car sales imagine what is happening in the holiday home sector.
    Unfortunately what your article doesn't say is that the GDP of the northeast, only accounts for 13.4% of Brazilian GDP, which is a tiny percentage when looked at objectively. What the article does say and which I agree with, is that the northeastern economy depends on the public sector and governmental handouts which is why that so far it hasn't felt the effect of the recession as yet. " A economia nordestina depende mais do setor público (transferências governamentais etc.), enquanto a do Sudeste é baseada no mercado privado (em que os efeitos da crise têm sido são mais intensos), e isso explica porque aqui as pessoas continuam consumindo e mantendo o mercado em nível de estabilidade, diz o economista Adriano Sarquis, diretor do Ipece."
    However as you must have read the article goes on to say that soon enough the recession will felt in the northeast too, and that the growth seen in the northeast was through governmental intervention. “O Nordeste cresceu nos últimos anos por impulso deliberado do governo federal. Este crescimento pode cair."
    A region where governmental handouts (unemployment benefit) can seriously affect regional growth doesn't seem to me like a great place to invest your money, especially in beach property. I think you'd be better off opening up a ' Spar '.
     
  18. debzor

    debzor New Member

    My point was that the problems in SP and Rio (such as the house price falls you mention, and that have been well documented), are not necessarily being repeated all over Brazil. The article says that the economy in NE could fall, but as yet this part of Brazil is not suffering like the South/SE. I am not the blinkered one!
     
  19. Mineiro

    Mineiro Member

    Imagine how much money a foreign buyer lost, who bought a property in July 2011. Not only was the housing market at record prices, the dollar was also valued at R$1.54. Since then the economy has crashed, house prices have fallen dramatically and the dollar is valued at over 3 reais having reached R$ 3.30 last month.
    Debzor, seriously consider how much money someone in that position must have lost.
     
  20. debzor

    debzor New Member

    In BRL, prices here have continued to rise for the past 8 years. It is an owner's decision as to when to sell and cash in, and exchange rates will be one factor (but not the only one), that they should consider if they want to repatriate funds.

    You quoting extremes of exchange rates is a bit like using statistics - you can pretty much have them say anything you want! For example, if someone bought at $3.30 last month, and sells next year at half that rate you might claim that prices have doubled in Brazil - but I would not say that. In your example if they had reinvested into another property in Brazil, would you still say they had lost a lot of money?

    Property prices here are measured in BRL and nothing else, and where I live they have not fallen dramatically at all.
     
  21. Mineiro

    Mineiro Member

    Living in a state that represents about 2.5% of Brazil's GDP, I don't suppose you will see much change, but it seems very unfair to other people who don't live here, to turn a blind eye to all of Brazil's economical and social problems.
    Brasil est entre os campees em assassinatos | Brasil: Diario de Pernambuco
    A taça de assassinatos é nossa
    As you can see from the articles, the economical situation in Brazil is probably not even the most important when considering whether to buy a home here. Brazil is world champion in the number of homicides worlwide and year after year this number increases. The state that you live in appears at number 7 in the list of most homicides per number of inhabitants.
     
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