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What's happening in the Brazilian real estate market

Discussion in 'Brazil Property' started by rowlandsbb, Apr 17, 2009.

  1. rowlandsbb

    rowlandsbb New Member

    Tell me Caterina
    When you paid this money did you get a bank guarantee?

    it is law in Spain but in past often ignored until recently and in any case no one in EU will buy off plan anymore for sometime due to recession

    Whilst I know that South America has not had the same economic problems yet as we have, surely they will be affected by the lack of EU and USA investors or is that not the case

    The advice to any one buying in Spain with a problem similar to yours is always....pay no more money and if out of contract time either for the start date or completion......then take action to get your money asap
     
  2. JMBroad

    JMBroad New Member

    Brian - the development Catarina bought is in Brazil not Spain?

    And bank guarantees in Brazil are not only not legally required but also incredibly rare as the cost is still ridiculously high (can be as high as 20% of the GDV - Gross Development Value) - apart from the paperwork taking up to 4 months to get.

    Regarding demand - for luxury holiday homes the recession will affect purchases anywhere around the globe. But not primary residences which are affected by the local markets.

    I can't speak for all of South America but the domestic market in Brazil is massive - so much so that the government just put 34 billion BRL into housing developments for the local market - aimed at creating 1 million new homes in Brazil over the next two years - even if this is achieved it will only reduce the current housing deficit by 14% to a long way yet to go before the demand slows down. However, this is the demand for low to medium income housing - not luxury developments
     
  3. Dotty

    Dotty Banned

    Rio Grande Norte depends heavily on overseas property investors ,most beachside projects and tower blocks in key tourist areas have been hit by the overseas recession .People may have you believe that Brasilians are buying up apartments,but it's really agents talk.

    Rio Grande Norte was buzzing with tourists interested in purchasing before the recession,but it's all gone quiet for the time being.From a positive side if you have the cash you can pick up a bargain with big discounts in tourists areas and hang on for the future .
     
  4. JMBroad

    JMBroad New Member

    /Sigh

    Dotty - do you live in the same Rio Grande do Norte as I do?

    "most beachside projects and tower blocks in key tourist areas have been hit by the overseas recession" - well of course the developments geared towards tourists have suffered due to the recession. However investors can invest in product for the local market which is still selling very well.. Feel free to come past my office and I'll show you the 7 units we have left - or I'll tell you who else you can visit who is also making sales. But I can guarantee you that you won't get a discount for buying one from us or from the others still making sales.
     
  5. robh

    robh Administrator Staff Member Premium Member

    Whilst we have seen a slow down we are still making sales of luxury property to overseas buyers. No discounts are given, but we don't sell anything in Ponta Negra or Buzios RN or Tabatinga, which are the most affected areas. Plus we only sell where there is either an existing rental market or the developer has solid plans on how to generate rental income for buyers.
     
  6. robh

    robh Administrator Staff Member Premium Member

    You are in print here John saying exactly the same thing: Low-income Brazilian property market set for huge growth : Brazil Property News
     
  7. JMBroad

    JMBroad New Member

    I think when Dotty said "Rio Grande do Norte", she meant "Ponta Negra" which is where everything has pretty much stopped and where you can probably find some good discounts.
     
  8. JMBroad

    JMBroad New Member

    Haha funnily enough I'm currently preparing a press release on that very subject to send to the people who bought with us - just to keep them updated. Although as you might have noticed by my recent reply to Dotty regarding the mortgage market - I've got the new mortgage figures now - when I spoke to the reporter I only had the figures from September 2008, now I have January 2009.

    Also, the % of GDP now is 4% - the figures I had at the time were 2% - still a tiny fraction compared to most markets.

    Here is the news I've just finished and am about to send out:

    Brazillian Government launches the "My House, My Life" plan

    While the rest of the world is in the middle of the worst economic recession of almost a century, Brazil has taken steps to decrease the current housing deficit of over 8 million homes by as much as 14% by injecting 34 billion R$ into financing the construction of residential units around the country.

    The demographic targeted by the new “My house, My life” plan are Brazilian families earning up to a maximum 10 times the minimum national wage – (currently R$ 465 per month).

    In addition to financing construction of adequate housing in capital cities, the houses of participants in the programme will automatically be insured, can register their properties at the local notary with discounts of between 80% and 100%, and will have their mortgages guaranteed by the fund in case they lose their source of income. For families earning 3 to 5 minimum wages – the fund will guarantee up to 36 payments, from 5 to 8 minimum wages – 24 payments and from 8 to 10 minimum wages - 12 payments

    Families may also apply for funding of up to R$ 23.000,00 per family towards the purchase of their home and will receive hefty discounts on interest rates for mortgage products. Interest rates for families earning up to 6 minimum wages which were as high as 8.16% p.a. will now be reduced to 6% p.a. – yet another incentive for the vast domestic market to purchase their own homes.
    The government is also offering significant stimuli for developers to focus on this segment of the market. The processes by which developers apply for building licenses and funding have been de-bureaucratized. This applies for developers not only of primary residential developments but also developers of the infrastructure within the developments and in surrounding areas. Tax on many raw materials required for the construction of primary residences have been significantly reduced in an attempt to encourage developers to increase the quality of the houses being built and therefore increase their longevity

    Here are the full details: http://www.minhacasaminhavida.gov.br/
     
    Last edited: Apr 17, 2009
  9. Dotty

    Dotty Banned

    The local market is selling better than tourist areas,but you may have also noticed that the developments that are selling happen to be the same as 1-2 yrs ago because more large companies are holding back on producing new projects or at least releasing them.Regarding discounts John I am not sure what company you work for ,but I know when I buy I am always asked make an offer!

    What company are you working for (question key does problem)

     
  10. dhoskings

    dhoskings New Member

    You honestly don't expect people to believe you Dooty? :rolleyes:
     
  11. JMBroad

    JMBroad New Member

    If you are always asked to make an offer when you buy I'd guess you are buying on the wrong developments?

    I work for a group of companies. Our core focus is the development of residential real estate geared towards the local market. Whereas we have built holiday apartments in Ponta Negra about a year and a half ago we shifted to building for the local market - targetting medium and low income Brazilian families.

    The name of the company is Grup Immobiliari Natal Brasil and our offices are in Ponta Negra - we were one of the two developers sponsoring the Real Estate fair last month so you will have seen our logo over the entrance when you walked in.

    Our current development is 65 plots and 48 houses - sales started in August last year and we only have two plots and 7 houses left - the developments which we were selling two years ago are all 100% sold out.
     
  12. Dotty

    Dotty Banned

    Hello John,

    The Grupo Imobiliari are a relatively new company in Natal. From what I know they sell the low build popular housing developments.My area of investments have never been in these developments,but mainly Moreaux Dubeux,Delphi who you will know of and private sales and as it is what I do buy and sell I'm well aware of discounts.
    May be the company you work for are the only agents in Natal that don't give discounts -but that's a first.

    I'd also like to mention that an article you wrote(printed on IV10 ) you mentioned that if you buy at the beginning you can receive discounts.

    Happy the sales are good ![.QUOTE=JMBroad;101908]If you are always asked to make an offer when you buy I'd guess you are buying on the wrong developments?

    I work for a group of companies. Our core focus is the development of residential real estate geared towards the local market. Whereas we have built holiday apartments in Ponta Negra about a year and a half ago we shifted to building for the local market - targetting medium and low income Brazilian families.

    The name of the company is Grup Immobiliari Natal Brasil and our offices are in Ponta Negra - we were one of the two developers sponsoring the Real Estate fair last month so you will have seen our logo over the entrance when you walked in.

    Our current development is 65 plots and 48 houses - sales started in August last year and we only have two plots and 7 houses left - the developments which we were selling two years ago are all 100% sold out.[/QUOTE]
     
  13. robh

    robh Administrator Staff Member Premium Member

    Dotty,

    John did not write the article on our web site, Low-income Brazilian property market set for huge growth : Brazil Property News, it was written by a journalist who writes for uv10, she merely quoted John.

    Regarding discounts, John said the following:

    "John Broad, sales manager at Grup Immobiliari Natal Brasil, explains that Brazilian real estate investors can purchase a property at the construction stage and receive a discount to market value. "

    To most people that means if you buy before construction has finished you will pay less than a comparable finished property. This is the norm when buying on a new development, regardless of the state of the economy. Nowhere does he say that you will be offered a discount because they are having trouble selling.

    Regards,
    Rob.
     
  14. robh

    robh Administrator Staff Member Premium Member

    Dotty,

    I nearly forgot to ask, what discounts are Delphi Engenharia offering?
     
  15. Dotty

    Dotty Banned

    If you are interested in purchasing the negotiation is between yourself and the company . I'm sure you understand.

    Regards

    D
     
  16. robh

    robh Administrator Staff Member Premium Member

    So what discounts were you offered?
     
  17. Dotty

    Dotty Banned

    Hello Booty!

    When you want to buy something here let me negotiate for you ,because I honestly don't believe for one minute you pay the asking price , unless you are working in sales and pulling my leg. that is.
     
  18. JMBroad

    JMBroad New Member

    Relatively new in Natal yes - but been here long enough to have a couple of completed and delivered developments, with another one in construction, one in licensing and another four or so in planning.

    Yes I know of Moura Dubeaux Engenharia and Delphi Engenharia - they have some fine developments - they build mainly the high end luxury developments with high end prices. All depends on your investment strategy - if you are buying to live there or as an investment, who your resale market is, how much you want your money to earn for you, etc.

    Grup Immobiliari hasn't built any Casas Popular (social housing projects) yet so not sure where you have that information from - the developments we've delivered so far are luxury apartments in Ponta Negra (as mentioned we were doing what everyone else was doing and building expensive apartments). Our current development is medium income housing (not popular but also not luxury) although the three bedroom villas cost less than an apartment in Ponta Negra the qualities will be above average for the price range.

    Regarding the article and the discounts - as Rob explained - if you buy during construction you get a discount to market value... in other words during construction you pay one price (the same price everyone pays), when construction is complete you pay another price. Standard way all developers do business with offplan developments all around the world.
     
  19. robh

    robh Administrator Staff Member Premium Member

    So what discounts were you offered?
     
  20. Dotty

    Dotty Banned

    John I appreciate what you are saying about discounts from pre-launches ,launches but discounts are had on pre launched prices,launching prices,buying and selling negotiations privately prices. I have bought from pre launches and not pre launches ,private individual sales and all with discounts. This is the country where cars and land are thrown in so as to complete sales and dsicounts are had across the board and not just new developments.I was just offered a Land Rover as part of a sales deal .My response was pretty quick "But I already have a car why do I need another". The sale went ahead without the lux car,but people do except cars,quite extrodinary really.

    As they say -Anything goes in Brasil !

    I'll visit some time[.I actually haven't seen the projects of your company,but i'll give you a call sometime.

    Happy Sunday.QUOTE=JMBroad;101941]Relatively new in Natal yes - but been here long enough to have a couple of completed and delivered developments, with another one in construction, one in licensing and another four or so in planning.

    Yes I know of Moura Dubeaux Engenharia and Delphi Engenharia - they have some fine developments - they build mainly the high end luxury developments with high end prices. All depends on your investment strategy - if you are buying to live there or as an investment, who your resale market is, how much you want your money to earn for you, etc.

    Grup Immobiliari hasn't built any Casas Popular (social housing projects) yet so not sure where you have that information from - the developments we've delivered so far are luxury apartments in Ponta Negra (as mentioned we were doing what everyone else was doing and building expensive apartments). Our current development is medium income housing (not popular but also not luxury) although the three bedroom villas cost less than an apartment in Ponta Negra the qualities will be above average for the price range.

    Regarding the article and the discounts - as Rob explained - if you buy during construction you get a discount to market value... in other words during construction you pay one price (the same price everyone pays), when construction is complete you pay another price. Standard way all developers do business with offplan developments all around the world.[/QUOTE]
     
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