Why only NE Brazil?

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Azure

New Member
I've been looking at the opportunities in Brazil for the past few months and all I can see are land plots/holiday homes on resorts and what seem to me to be apartments in cities where resales and rentals could be difficult. E.g. Natal and the North East.

Why can't I find property in the big cities that are drivers of the Brazilian economy? Sao Paulo, Rio, Brazilia etc. These are places where there is massive local demand for property resales and rentals.

Am I right in concluding that this contrast is because local developers in low key cities and holiday resorts like Natal and the NE coast find it difficult to offload property to locals therefore they offer it to the overseas market with inflated prices that often have rental guarantees built into the price?

And that foreign agents can't get into the market in big cities simply because property in such locations sell easily to locals therefore local developers don't need to bother engaging foreign agents and pay their hefty commissions?

Does anybody have any suggestions on how I can find opportunities e.g. off plan apartment in the big Brazilian cities? Are there any foreign agents that have that specialism?
 
S

Sao P

New Member
I've been looking at the opportunities in Brazil for the past few months and all I can see are land plots/holiday homes on resorts and what seem to me to be apartments in cities where resales and rentals could be difficult. E.g. Natal and the North East.

Why can't I find property in the big cities that are drivers of the Brazilian economy? Sao Paulo, Rio, Brazilia etc. These are places where there is massive local demand for property resales and rentals.

Am I right in concluding that this contrast is because local developers in low key cities and holiday resorts like Natal and the NE coast find it difficult to offload property to locals therefore they offer it to the overseas market with inflated prices that often have rental guarantees built into the price?

And that foreign agents can't get into the market in big cities simply because property in such locations sell easily to locals therefore local developers don't need to bother engaging foreign agents and pay their hefty commissions?

Does anybody have any suggestions on how I can find opportunities e.g. off plan apartment in the big Brazilian cities? Are there any foreign agents that have that specialism?
I know its very rarley talked about on this forum, but your are right in saying the the driving force is in the south of Brasil i.e Sao Paulo, Rio, Brasilia, Porto Alegre. This forum is mainly based around foreingers who have one of those holiday home dreams, and think the NE is Brasil. The reality is that property markets in the main cities Sao Paulo, Rio, Brasilia, Porto Alegre are have alot of liquidity mainly becuase majority of the population, industry and jobs are down here. If you get guidance in selecting and buying new or used apartments in an Ok area in these cities, you can easliy rent it for long contracts ( few years),and when you get tired of it, sell it within 6 months with an excellent chance of a good return. No headache like you see in many of these threads. I know from experience from living in Sao Paulo for the past 6 years. The apartment I bought 5 years ago in Sao Paulo, will be selling in 6 months and will now be able to by 2 aptos. Its was the easiest thing I ever did to make money in my life.

For a reference as to the leading property website, in at least Sao Paulo. Most people consult before people buying used and new apartments. Just google "Zap Imoveis". This is the place that will open the door.
 
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JMBroad

New Member
Basically a two pronged question:

1) Most foreign developers focused on the NE of Brazil when planning their holiday home resorts geared towards foreign investors simply because the weather in the NE is a that much more attractive than the South. As you specifically mentioned Natal, the weather here is very rarely below 27 ºC and very rarely above 32 ºC (all year round). In 2010 I went to São Paulo four times at different times of the year and about the same amount of times to Rio de Janeiro. Temperature in São Paulo was as low as 10 ºC and as high as 27 ºC and Rio was similar. Hence, most foreign developers who have been focusing on selling to foreign buyers built where foreigners would be most likely to buy - somewhere with easy access to great beaches and all year round warm weather.

2) All of the large Brazilian developers have constructions in the NE of Brazil for a very simple reason. The NE is and always has been the poorest region of Brazil so the housing deficit is not only the largest of the country but also what the government consider "inadequate housing" is far greater in the NE than in other regions (mud huts, etc).

Why do you say that rentals and resales in Natal are hard while in São Paulo and Rio and Brasilia they are easier? Just curious as to what factors you are using to determine that. 6 months ago when we did a comparative market analysis for our latest launch in Petrópolis (business centre of Natal) there were seven or eight developments being launched at the same time - we recently updated the analysis and almost all of them were totally sold out and at much higher prices due to capital appreciation. I've worked with lots of markets in lots of countries and I certainly wouldn't class the demand in Natal city centre as anything but high.

As far as I know, there are very few developers in the NE who can be bothered to deal with foreign investors as they are a lot more demanding than the locals and they want to earn some profit so they expect a discount to market prices yet expect a much higher level of service than the locals. In Natal we are one of the only developers who cater to this market and even then that side of our business represents less than 1% of our total sales volume - 99% of what we are building is not available to the overseas investor because the profit margins simply aren't there and demand is that much higher with the local market.
 
A

Azure

New Member
Holiday home in NE Brazil fine if that's what you want. But generally even holiday home seekers also want to see scope for profit.

Investment? I wonder. Who are you reselling to? How many of these plots purchased off-plan on these beach developments have successfully resold? Is there a market ready and waiting to buy from you? Or is it the gamble that this part of Brazil 'may' develop and there 'may' be resell opportunities and profit in the future? On a stretch of coast that is thousands of kilometers there isn't exactly a shortage of land and new development possibilities.

I've had various opportunities presented to me in the city of Natal some with rental guarantees. The impression I am left with is that perhaps there isn't the rental and resale opportunities in low key places like Natal compared to big cities. I would guess there is a high proportion of foreign buyers hoping to cash in in the future. Experience shows that this leads to oversupply and slows down capital growth.

I am asking myself where are the banks based? where is the industry, where are the foreign company HQ's, which are the areas where most people want to live so they can be near jobs. I don't think it's the NE.

You say developers in NE don't want to deal with foreigners. However I'm sure any European buyer could pick up the phone and reserve a unit just like that in Natal. I've seen nothing offered by European agencies that are in the economic hubs of Brazil.

Perhaps developers in big cities don't want to bother with European investors because there is enough demand locally and they don't want to bother with huge agency mark-ups?
 
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2F2F

New Member
Hello, I'm a different case: I'm interested in a small but new property anywhere in Brasil as long as it is NOT in the big cities. And it would be not for investment but for I would be living in it for a few years.

Price? The lowest possible :) Any advice?

Thank you
 
J

JMBroad

New Member
Holiday home in NE Brazil fine if that's what you want. But generally even holiday home seekers also want to see scope for profit.

Investment? I wonder. Who are you reselling to? How many of these plots purchased off-plan on these beach developments have successfully resold? Is there a market ready and waiting to buy from you? Or is it the gamble that this part of Brazil 'may' develop and there 'may' be resell opportunities and profit in the future? On a stretch of coast that is thousands of kilometers there isn't exactly a shortage of land and new development possibilities.
Absolutely no idea - if you had read my signature you'd see we don't sell "beach developments" and we don't sell "holiday homes" - we sell what Brazilians buy - most of what we are currently building is Social housing. We build in the city centres or just outside the city centres in what are defined as urban growth areas.

I've had various opportunities presented to me in the city of Natal some with rental guarantees. The impression I am left with is that perhaps there isn't the rental and resale opportunities in low key places like Natal compared to big cities. I would guess there is a high proportion of foreign buyers hoping to cash in in the future. Experience shows that this leads to oversupply and slows down capital growth.
Foreign buyers are very limited compared to Brazilian buyers.

I am asking myself where are the banks based? where is the industry, where are the foreign company HQ's, which are the areas where most people want to live so they can be near jobs. I don't think it's the NE.
In a sense that is very true - wages are much higher in the south than in the north and many people want to to live and work in the south because of that. People use the north as somewhere to have holidays. But as mentioned also before, the NE of the country has always been the poorest region with the highest housing deficit and the highest percentage of houses considered as "inadequate" - the official numbers are readily available on the internet to download and check yourself, as long as you speak Portuguese. Sure, many will say that official statistics aren't always 100% accurate
in Brazil and I'd agree with them - but they are so vastly different that they are enough to understand what the situation is.

You say developers in NE don't want to deal with foreigners. However I'm sure any European buyer could pick up the phone and reserve a unit just like that in Natal. I've seen nothing offered by European agencies that are in the economic hubs of Brazil.
By all means try it. Good luck. Let us know if you manage to get a price and availability list.

Perhaps developers in big cities don't want to bother with European investors because there is enough demand locally and they don't want to bother with huge agency mark-ups?
Almost - like I said earlier, it's developers in "EVERY" city don't want to bother with European investors because there is enough demand locally.
 
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dhoskings

New Member
I've been looking at the opportunities in Brazil for the past few months and all I can see are land plots/holiday homes on resorts and what seem to me to be apartments in cities where resales and rentals could be difficult. E.g. Natal and the North East.
I agree with you, there are a lot of resorts targeted to feoeigners that are really best avoided. I am amazed some agents are saying that they are selling way below market value, which just doesn't make sense if the market is booming. I can understand that some places are priced less than similar other developments to sell faster, but when someone claims that theirs is 30% below market value then you have to ask questions.
 
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2F2F

New Member
Hi,

We don't have anything in that budget.

You can find property for that sort of money but it will either be very out of the way or it will be very basic and/or rundown. Since you want to stay here for a few years I'd suggest you come and visit and find the town that suits your lifestyle and budget.

Regards,
Rob.
Out of the way is good, as long as I can get fast internet access, I don't like big cities.

Thanks
 
J

JMBroad

New Member
I agree with you, there are a lot of resorts targeted to feoeigners that are really best avoided. I am amazed some agents are saying that they are selling way below market value, which just doesn't make sense if the market is booming. I can understand that some places are priced less than similar other developments to sell faster, but when someone claims that theirs is 30% below market value then you have to ask questions.
The important thing is to ask the questions and determine if it makes sense to you. The developments we do make available to foreign investors for example are well below market value for a very simple reason. We prefer (on those specific developments) to sell to overseas investors who pay 100% of the value of the property by the end of completion rather than to an end user who will pay only 30% during construction and 70% on completion even if the price we can achieve is lower so that the investor can also make a good profit. Of course there are also Brazilians who buy with that payment plan (this week for example one of the last units was sold to a local on that payment plan) but the vast majority want to do the standard 30/70 payment plan, even with INCC and IGPM being included during construction and on completion...
 
A

Adriano

New Member
2F2F

Mayby this is a place for you?
Z U M B I

It was built in 2006, 1 hour drive north of Natal, outside a smill and quiet village.

I see there is resales for 50 000 Eur, but there might be possible to bargain.

The condo have wireless internet.

Adriano
 
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dhoskings

New Member
The important thing is to ask the questions and determine if it makes sense to you. The developments we do make available to foreign investors for example are well below market value for a very simple reason. We prefer (on those specific developments) to sell to overseas investors who pay 100% of the value of the property by the end of completion rather than to an end user who will pay only 30% during construction and 70% on completion even if the price we can achieve is lower so that the investor can also make a good profit. Of course there are also Brazilians who buy with that payment plan (this week for example one of the last units was sold to a local on that payment plan) but the vast majority want to do the standard 30/70 payment plan, even with INCC and IGPM being included during construction and on completion...
I see your point and I can see why you offer your product under market value.

I was referring to property you can buy on 100 or 50 payments which simple economics dictates that the value of the property has to be pumped up and then a claim made that the price is 30 or 40% below market value.
 
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