Now the hunt is on to discover the best places to invest in real estate. Ruban Selvanayagam of the Brazil Real Estate & Land Investment Guide, gives his view on Brazil’s property hot spots.
There are now several areas in Brazil that have become recognised as overseas buyer ‘hubs’ as investors look to take advantage of the favourable conditions. Natal, Recife, Fortaleza and other parts of the north east present strong capital growth prospects supported by significant public and private infrastructural investments.
In the south, where the majority of Brazil’s wealth is concentrated, the metropolitan regions of Rio de Janeiro, São Paulo, Porto Alegre and Curitiba have also long been the destination of choice for foreign investors, particularly Europeans.
But I believe there are ‘untapped’ parts of the country that are presenting interesting economic fundamentals and which are worth taking a look at from an investment perspective.
Maranhão
Promoted as the ‘state of opportunities’, it is currently the country’s second highest growing region due to a variety of factors including the development of what will be one of the largest oil refineries in Brazil close to the capital, São Luís. The state government recently announced a housing deficit of 570,600 units, the highest in the country, which has led to both the national house builders creating development projects and local buyers looking to take advantage of capital gains and the strong demand for rental property.
Espírito Santo
This is another petroleum pole located in the south east. The state offers strong economical prospects as well as a relatively high standard of living. The Espírito Santo Industrial Development Institute estimates that by 2020, R$130 billion will have been invested in the private sector in addition to several public funding initiatives such as the Growth Acceleration Programme. The housing sector has witnessed a renewed sense of optimism as a result of growing demand and the availability of mortgage finance particularly in the capital Vitória and its neighbouring cities of Cariacica, Serra and Vila Velha. Buying potential includes short term development profit possibilities, buy to let and apartment hotel real estate with potentially above average yields.
Goiás
This central west state is undergoing rapid transformation as a result of its growing agri-business sector chiefly centred around beef and soy production that is complemented by fiscal incentives and improving infrastructure. It is estimated to have a housing deficit of over 200,000 units with an expected annual construction rate of between 20,000 and 25,000. This year the state was highlighted as an exemplary model for the ‘Minha Casa, Minha Vida’ (‘My House, My Life’) programme prompted by a healthy demand for good quality and low cost housing. Phase two will be launched in the state shortly.
