The property market in Natal, Brazil- INVESTMENT OVERVIEW
 Established property markets tend to show a slow yet stable growth trend, however capital growth is limited due to a higher initial valuation. Because of this, many professional international property investors are expanding their geographical horizons and expressing increased interest for more exotic emerging real estate products that offer potential for higher capital growth. Emerging property markets offer a potentially high capital growth but comes with an associated higher risk.
As with all markets, the earlier you invest, the greater your profit potential. Defining moments and timing are always the catalyst for any property investment opportunity and when investing in an emerging market, timing is of even greater importance. If one picks the right time to invest in an emerging property market, there can be significant capital growth. Pick the wrong time, however, and you may be taking on all the risk in return for little or no reward.
An example of “wrong timing” would be to buy property in an area that is not receiving financial interest and seeing no increase in tourism. Property prices might be very low, but on the other hand the risk is very big and potential gains might never materialize or it might take a very long time. Another example of “wrong timing” would be to invest in an area where prices are flattening out where the market is turning into a more established market.
 An example of “good timing” would be to buy in an area where tourism has been growing for some time but the property market is still in its infancy. For professional property investors who wants to maximize capital growth while minimizing risk, this is the best time to invest as property prices are extremely low in comparison to what they are expected to be and at the same time there are strong signs that the area will become even more popular. The property market in Natal-Brazil is now at that stage and offers investors a unique chance to get in early and benefit from several years of capital growth. In conclusion, all indications show a huge potential for the property sector in this truly remarkable part of Brazil. Whether you are looking for a holiday home or an investment, we will be pleased to guide you all the way. Emerging markets offer a potentially high capital growth but come with an increased element of risk.
What Brazil has to offer?
- The country of Brazil is a growing economy. Brazil is one of the four largest developing economies in the world (the three others being China, India and Russia) and according to Goldman Sachs, by 2050 Brazil will be the 5th biggest economy in the World. There are no restrictions for foreigners buying property or investing in Brazil. All of our properties are 100% freehold.
- Lower interest rates and inflation now under control (5.6% inflation in 2005) makes Brazil appeal as an area to invest. Many economists believe that within a few years, Brazil should have become a magnet for property investors. It is likely the steadily improving fiscal reforms and economic stability should allow Brazilian interest rates to drop significantly. Today Brazil’s mortgage lending is almost non-existent, but with the decrease of interest rates, a mortgage lending boom is expected and consequently, an increase in property values.
- A realistic guarantee of long term future market stability along with existing demand (for sales and rentals) which provides security for foreign property investors. Brazil has a population of approx. 180 million which includes more than 1 million multi-millionaires who are already purchasing properties in the coastal areas around Natal and its surrounding areas. Along with future domestic economic growth and increasing spending powers of the massive population in Brazil, this trend is set to continue and increase. The exchange rate is exceptionally favourable at the moment making it very cheap for Europeans (Sterling or Euros) to buy property. In the past, the Brazilian currency was artificially linked 1:1 to the US$ (now it’s 2.5:1, one dollar buys 2.5 Reais, the currency in Brazil), and most prices still reflect these old price levels.
- Under priced property, due to continuous years of recession and lack of purchase power during the 80’s and 90’s, the price level for purchasing property is extremely attractive (there are many similarities to how Spain was 20 years ago, and we all wish we had the fore thought to have bought then!)
- Promoting tourism is a top priority in the Ministry of Tourism’s agenda and the National Tourism Plan is clearly working. There has been a 48% increase in foreign tourism between 2002 and 2005 as a direct result of the National Tourism Plan (developed in 2003).
- Brazil is a peaceful country and is not affected by political wars or terrorism.
- In a recent survey, 96% of the tourists visiting Brazil have said they would like to return to the country. This is mainly because of the friendliness of the Brazilian people, which certainly gives confidence in the growing tourism market in this exciting country.
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