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World Property Values Dropping..why will Brazil increase?

Discussion in 'Brazil Property' started by Golfingworld, Nov 1, 2007.

  1. Golfingworld

    Golfingworld New Member

    Here's a conundrum for you, interested to hear the views. Clearly the US sub prime debacle has triggered a stagnation or drop in world property markets. Perhaps this is more due to the credit squeeze associated with this problem, but either way there now seems to be a correction here or coming. It seems that many of these property markets have been falsely stimulated by cheap loans but now the confidence element is eroding..where are all the new buyers and consequent price increases going to come from? In terms of Brazil there are no loans (not for foreigners anyway) so that may be an advantage but in effect many buying off plan see their staged payments as a form of borrowing. More importantly, why is Brazil going to buck the world trend?
     
  2. RalphJ

    RalphJ New Member


    property values have increased here for a foreign investor over the last two years simply because of the valuation of the currency. As far as brazil increasing while the world decreases....would be difficult for me to justify that one.

    The key to investing here, like anywhere, is to get in early and know what's going on in the area. We purchased a large, beachfront property 4 years ago when we first got word of brazil's largest tourism company, CVC, was negotiating to buy a huge tract of land to build a resort a few kilometers from where we had an opportunity to buy. We negotiated a price that was actually 60% of the current market value at that time, and since we bought CVC has gotten their building permissions within the last 90 days and numerous other condominiums have sprung up in the area. Our land since our purchase has appreciated 260%, but with the strengthening of the real it is much more than that! We bought when the pound was 5.3:1...it's now 3.6.
     
  3. JMBroad

    JMBroad New Member

    Interesting. Any credible sources which helped you arrive at this conclusion or just wishful speculation on your behalf? (don't mean to start a debate but I like promoting the "think for yourself, don't just take the garbage and nonsense people try to spoon feed you".)
     
  4. Golfingworld

    Golfingworld New Member

    I am speaking about the actual price people get when they sell and not the perceived asking price. There seems no doubt the the US market is dropping, certainly the UK market is stagnant....the "Costas" nobody can sell anything I just don't beleive anyone who tells me otherwise....Europe in general, guessing....its a discussion point overall and in relation to Brazil and I just want to hear how the assumptions that (real) prices will increase. I bought recently and straight away got 20% off the asking price and there are now only 3 of 10 units left. A paradox, units selling fast but prices dropping...how does supply and demand explain that and how therefore can value appreciation be justified?
     
    Last edited: Nov 1, 2007
  5. RalphJ

    RalphJ New Member


    GW, in my experience here in Brazil, unfortunately for we gringo's, the property we're sold is normally sold for a price well above current market value for that area. Another reason why people need to do their own due diligence and find local people they can trust....it's not easy.

    The project I am developing at the moment, 3 beachfront condominiums, are being sold for exactly what their current market values are here in Brazil. Another condominium right down the street which is being built by the ex-governors son, and have sold 95% of their units in the first 4 months of sales, have identical sized lots, building space, etc, and were sold at the very figures we're asking for today. And 97% of the units to this point have been sold to brazilians.

    Out of curiousity...where did you buy? Don't tell me Fortaleza/Natal. The onrush of gringo's have pushed prices there through the roof ridiculously.
     
  6. Golfingworld

    Golfingworld New Member

    I did indeed buy in Natal, right in Ponta Negra. I think my place is reasonable considering the position close to all "amenities" and anyway it is what I want and is not for profit so my motivation is different. However, it is not an offplan development (it is 90% complete) it is a small block and I am not tied to a management company or anything. It was a private purchase and sale really...but I did my own research and went there numerous times etc. I didn't buy mine through a computer screen or at a cocktail party! I also bought here as whatever happens there will always be tourism and growth in this location...but overall i was incharge of my own destiny. I didn't use an Agent bought direct from the builder.
     
  7. JMBroad

    JMBroad New Member

    Out of curiousity, what was the €/m2 after you got the 20% discount?
     
  8. beenthere

    beenthere Guest


    Wow this just gets better and better.

    I think there was a long discussion on here about discounts, where I think even you were saying that developers that offer discounts should be avoided like the plague.

    Anyway if you could get 20% why not 30 or 40% as it sounds like the markup was huge .....
     
  9. beenthere

    beenthere Guest

    1.1% growth for October sounds stagnant to me too :eek:
     
  10. JMBroad

    JMBroad New Member

    Wooosh right over my head. What are you talking about 1.1% growth? Did I miss some figures somewhere lol :p
     
  11. beenthere

    beenthere Guest

    Nationwide posted their figures today.
     
  12. beenthere

    beenthere Guest

    I should have guessed you were a developer. I suppose you are the local person we can trust?
     
  13. Golfingworld

    Golfingworld New Member

    Speaking of Brazil, if demand is increasing, why are prices dropping? Why, because the advertised prices are not real..the real prices are the ones you pay. So when you are told the next phase is x+10% or whatever it is a fictional value not a real one. Consequently, investors like to think they are making money so are happy to believe the fictional prices, not the real ones...there is evidence of this all over the place in Brazil. I don't think Brazil prices will crash as yes there is demand and it is developing but I don't think the potential gains are anything like what people are hoping for...plus 25% increase on a £50k property is not very much money really. In Europe particularly Uk and Spain/Portugal I think the crash is coming if not here already.
     
  14. RalphJ

    RalphJ New Member


    No...don't "trust" anyone. Do your due diligence. Come to Brazil, meet our team. See our land titles, architectural plans, approvals, investments and assets. Get your own brazilian lawyer, do research. You'll find that my partners and myself are not crooks...a rare comodity in the brazil foreign investment marketplace.
     
  15. davros909

    davros909 New Member

    davros909

    hello there im just wondering what members on this site think about the current crisis affecting the economy i can see in my job people are cutting back on expenses i felt it back in september and its got muc h worse does anyone think brazilian house prices will be affected for gringos and locals? the thomson flight pull out has made me think twice of buying in the short term plus the weak pound of course thou brazil is so great how do recent purchasers feel i understand not everyone is out to make a quick buck cause we all know brazil is a special place etc any advice will be helpful are most people happy with there off plan? il probably pop back in november hope then some new direct routes will come about have a\ nice day. any info i get il put it up cheers davros
     
  16. JMBroad

    JMBroad New Member

    From an agents point of view we just had a record month of February - best since the company started four years ago. People seem to be wary of banks, stocks and shares and other investment vehicles. Property seems to be more popular than ever.
     
  17. ady1231

    ady1231 New Member

    Dear All;

    This would be a good opportunity for all of us to discuss the current Real estate situation.

    Europe, NA, South East Asia, Japan prices are all dropping, and thats due to the credit crunch. These markets have ALWAYS been mutually connected to eachother by away or another.

    I personally think Brazil is a safe heaven in these stormy conditions, investors are grabbing a properties with a good prices, and waiting for em to appreciate, why have they gone to Brazil? Because everyother market in the world is saturated with some few exceptions. Look at Spain, France, Germany, UK , America, Japan, HK, China, Singapore, Montenegro, Ireland, Bulgaria, Estonia, Latvia, Portugal, Greece .. and the list goes on, all of these markets are coming down badly and not to be touched until mid 2009 In My opinion.

    So, why do people go to Brazil? well some people will always have a cash to invest, even in a difficult financial period like this, so Brazil is still undervalued, and alot of properties start for under 7K Pounds, so it's not a bad time to invest.

    I beleive the credit crunch will benefit Brazil further, where investors have very few options to invest in. Other options in My own choice are: Ras al Khiema, UAE and Malaysia!
     
  18. RalphJ

    RalphJ New Member


    7K GBP? I'm sorry Ady, but I live in Aracaju, which has property prices that arrive nowhere near the likes of Salvador, Natal, Fortaleza, Recife, Rio de Janeiro, Sao Paulo, etc, and for 20,000 reais (that's 7K GBP basically), you can't buy a used Fiat Uno, let alone a decent lot. Now if you're talking about a 500 meter squared lot in the middle of nowhere with no basic infrastructure whatsover......I can sell you thousands of those for 20,000 reais, but that's a different matter alltogether as far as investments, or building a house with running water and electricity are concerned.
     
  19. robh

    robh Administrator Staff Member Premium Member

    In terms of numbers of sales uv10 has also had a record month in February, but March is already better.
     
  20. robh

    robh Administrator Staff Member Premium Member

    This might answer some of your questions regarding the affect of the credit crisis on Brazil:

    Mortgage reform key to Brazil property boom : Brazil Property News

    Brazil poised to weather credit storm, says finance minister : Brazil Property News

    Regarding the thomson pullout, I still only hear the same thing from their head office, mainly that first choice will most likely fly to Natal instead.
     
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