There are all sorts of reasons people decide to go to Brazil on holiday. There are so many sights, it’s hard to know where to start. From the Amazon River and rainforest to the amazing Foz do Iguacu Waterfalls in the south, the myriad beaches across the country including the likes of Fortaleza and Salvador, and of course the buzz of festivals like Iemanja (Goddess of the Sea Festival) and the Rio carnival, there’s so much – too much – to see. And there are activities aplenty – surfing in Rio, fishing, rock climbing, wildlife walks, river journeys up the Amazon. Plenty to keep any holidaymaker captivated throughout their stay in Brazil.
But what about those that like Brazil so much that they’d like to stay? What does it cost to buy property in Brazil, and how is the Brazilian property market faring at the moment.
To use a footballing cliché, it’s a game of two halves as far as the Brazilian property market is concerned. In the big cities, as salaries have increased, people are able to afford more and mortgages have been easier to achieve. However, for everyone who benefits there are others who cannot meet their repayments.
Rio, in particular, has seen a housing market that has been “extremely profitable for the last five years,” according to Charles Morphett of Rio Exclusive in Ipanema. The FIPE-ZAP index indicates that house prices in Rio are up 250% and up 200% in Sao Paulo in the past six years. But Morphett adds that things have been less frenzied in the last year: “The water has calmed but it’s still a strong market,” with prices having stabilised, and speculation lessened.
The highest prices are to be found in the likes of Ipanema and Leblon, where beachfront properties can cost up to BRL 40,000 (£10,700) per square metre (Even in Westminster, one of the most expensive places to live in London, you’ll pay less per square metre – an average of £7,587). Currently on the market is a three bedroom, three bathroom apartment in Ipanema, with a balcony, terrace, sea view and private pool for BRL 4,200,000 (around £1,125,000). Another, more modest apartment in Flamengo has views to the Guanabarra Bay, and is on for BRL 2,600,000 (around £700,000). This property is described as having the perfect location for executives working in the centre or in Botafogo/Flamengo.
The rise in house prices is in no small part due to Brazil being awarded not only this year’s World Cup, but also the 2016 Olympic Games. International eyes are on Brazil, and those looking to purchase a property there – both Brazilians and foreigners – are cashing in.
All over Brazil, people are being encouraged to buy property – to snap up the latest homes at brand new developments that are popping up over the country. These high prices have raised fears of a Brazilian housing market ‘bubble’ – or ‘bolha’ to give it the local name – though some argue that because these prices were not brought about by an over-reliance on credit but a lack of supply to satisfy demand. But the fact is that Brazil has seen its economy strengthen partly off the back of consumer credit, and property has played its part here.
Brazil has recently started to experience slower economic growth, and to try and keep higher inflation down, interest rates have risen to their highest point since 2012.
For expats looking to buy property in Brazil, they’ll be hoping the perceived bubble bursts, and that their money goes further.
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