Brazil’s big buy

While European media dishes up daily doses of recession and global credit crunch, on the other side of the world things could hardly be more different. In Brazil, GDP growth predictions are healthy, foreign reserves have seen massive increases and Brazilian consumers cannot get enough retail therapy. And this includes property.

The International Monetary Fund (IMF) forecasts swings and roundabouts for the world economy in 2008 with the US predicted to come in at a miserable 0.5% GDP growth and the eurozone barely scraping over 1.3% growth. On the other hand, China reaches almost double figures with forecasts of 9.3% and Brazil is expected to achieve a healthy 4.8%.

The tandem Brazil-China is not accidental – Brazil has discovered an almost unlimited export market in China and the Chinese economy’s spectacular results are having hugely positive effects on Brazil. The market for Brazilian goods within China seems unlimited and whether it is Brazilian fertiliser, machinery or beef, China has the demand for it. Not surprisingly, Brazilian factories are working to capacity and unemployment figures are at a record low. “At a time when many countries are facing recession, Brazil’s economy is booming,” comments James Gonzalez, Market Analyst at Obelisk. “Furthermore, many experts predict that Brazil will rank among the world’s top 4 global economies by 2050, all promising news for the property investor.”

This fervent economic activity translates directly to a wealthier population. According to the Brazilian Institute of Geography and Statistics, Brazil’s middle class represented 46% of the population in 2007, a rise of 12% on 2005. This larger middle class has money to spend – car sales rose by nearly one fifth during the first 3 months of 2008 – and most aspire to own a property. With 16% planning to purchase their own home in 2008, the positive consequences for property investment are obvious.

Greater consumer power has also led to an increase in tourism, particularly within the domestic market and north east Brazil is fast becoming a favourite with Brazilian tourists. In addition, the Brazilian tourist agency, Embratur, has recently embarked on a high-profile publicity campaign in Europe, which aims to further promote Brazil as a holiday destination. Embratur has focused largely on the north east region, known for its idyllic beach front locations. Between them, domestic and international tourists vastly increase buy-to-let potential in Brazilian coastal resorts, for example, beach locations near Natal.

Brazil is also a favourite with property investors. In a recent market research survey carried out by Obelisk, Brazil ranked second as the favourite place for property buyers. Not surprisingly, investors are attracted to Brazil’s beautiful coastline and the same survey found that the overwhelming majority were looking for a beachfront location. With investors’ requirements in mind, Obelisk is offering the Águas Cristalinas project, 2 bedroom apartments situated on a tropical beach – 110 metres from the water’s edge – near Natal with prices starting at £55,450.

As many Western countries find themselves plunging into recession, in South America’s largest country there are no signs of economic decline and ‘credit crunch’ is an unknown term among Brazil’s fervent consumers. With property purchase high on the wish-list of Brazil’s aspirational middle class, investors in Brazilian properties find themselves with a ready-made exit strategy. And if you do not plan to sell immediately, ever-increasing tourist numbers mean buy-to-let holiday properties are an appealing alternative. Why not buy in 2008 and take a leaf out of Brazil’s new middle class’ book?

Obelisk is currently offering the Águas Cristalinas project in north east Brazil.

For more information on this or other investment projects, obeliskinternational.com