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Brazil prepares to build on World Cup legacy

30th June 2014 Print
Previous Project in Natal, Bosque Residencial

The World Cup may have centre stage, but Brazil’s presidential campaign is now heating up with the ruling Workers’ Party this week officially endorsing Dilma Rousseff to run for re-election. She promises to continue with social policies that have already lifted millions out of poverty.

Samantha Gore, Sales Manager for Brazil-specialist estate agent, says, “By and large the World Cup has run very smoothly and, despite some protests against overspending, the new transport and infrastructure will serve well beyond the event. They include over 200 upgrades to electrical systems in the 12 host cities, various new light rail and bus networks, and several airport expansions from new terminals to entirely new facilities such as Aeroporto Internacional Governador Aluízio Alves in Natal which opened on 31 May. However, what Brazilian citizens will want to see more of going forward, is investment in housing, education and public health.”

During its tenure, the Workers’ Party has presided over 12 years of prosperity – albeit with real economic growth slowing from 6.1% in 2007, when they ‘won’ the World Cup, to a forecast 1.5% in 2014. Under two terms with Lula da Silva and one term with Dilma Rousseff, unemployment is at a record low, 36 million people have been lifted out of extreme poverty and millions more have received state benefits such as the monthly Bolsa Familia cash payout and the Minha Casa Minha Vida (My House My Life) subsidised housing project.

Samantha continues, “Minha Casa Minha Vida was launched five years ago to get Brazil’s poorest out of slum conditions and into decent housing. The country faced a shortage of 5.24 million homes and the programme allows low-income families to become property owners by way of heavily subsidised mortgages offered via the state bank. The housing shortage has been reduced significantly and certainly the World Cup will provide some assistance going forward with income generated from the worlds’ most popular sporting event reinvested into public expenditure for Brazil’s most needy.”

Demand for Minha Casa Minha Vida homes is still very high with approved families sitting on ever-growing waiting lists. Progress is slow-going as home-grown developer finance is prohibitively costly and typically bureaucratic. However, an award-winning UK-based developer is taking advantage of this situation and already on its seventh social housing project in Brazil, namely Monte Alegre in the city of Porto Alegre in Brazil’s far south.

Private overseas investors are able to participate in Minha Casa Minha Vida with a very clear exit strategy. The full investment amount plus returns are delivered in just 12 months. Furthermore, all investment is done through a UK escrow account and subject to UK law to provide maximum security.

Monte Alegre is one of the first social housing projects in the south of the country, an area with heavy investment from industry resulting in a booming economy and very high employment levels. Located in Alvorada, a suburban zone with a population of 200,000, just 16km from Porto Alegre centre, it’s a catchment area for the city itself as well as nearby General Motors and Pirelli Tyre plants which employ thousands of local workers.

The initial phase of Monte Alegre comprises 500 two-storey two-bedroom houses with essential infrastructure alongside, such as a nursery, school, health centre, sports facilities, a church, bus station, police station, DIY store and supermarket. All is built to superior quality using innovative techniques that mean each property is constructed and sold to a pre-qualified mortgage-approved buyer within 12 months – the ‘very clear exit strategy’ mentioned earlier.

Priced at just 21,000 GBP (currency fixed) per property with those buying between one and ten units enjoying a fixed return of 15% over a 12 month period, rising to 16.5% for those wishing to roll their investment for a three-year period. This figures jumps to 16% over 12 months and 17.5% over three years for investors purchasing 11 or more units.

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