Why Invest in Brazil?
Increasing Ecotourism
Ecotourism is increasing rapidly in the North East of Brazil and Ecocity Brasil is destined to become the largest eco-friendly residential beach resort in Brazil. The area and development will have the full support of both the national and federal governments who are keen to promote the area for ecotourism and sustainable property development. Ecotourism is one of the world’s fastest growing industries predicted to expand by 25% over the next 6 years and worth an impressive US$473.6 billion per annum (Source: International Ecotourism Society).
Buoyant All-year Round Tourism
North East Brazil has one of the strongest tourism and real estate markets in the country with over 6 million foreign tourists. It is also the most popular destination for the majority of the 50 million Brazilian tourists who holiday in Brazil each year. The tourism industry is booming with experts predicting that over 300 additional passenger aircrafts will be required over the next 20 years to cope with tourism growth. The climate is sunny and warm with little variation throughout the year, attracting Europeans, Americans and Brazilians across all seasons. Demand for quality holiday property is therefore high, particularly property located in resorts that offer a variety of amenities and fit in well with their surrounding environment.
International Events – 2014 World Cup and 2016 Olympics
Brazil’s tourism industry is benefitting greatly from the announcement of several high profile events to be held in the country. The 2014 FIFA World Cup and the 2016 Olympics in Rio de Janeiro is set to be a huge draw for visitors to the country. Local and federal governments have allocated a total investment of €13 billion to improve infrastructure and facilities throughout the country ahead of the World Cup (Source: bbc.co.uk). Both events will further raise the country’s profile, increase foreign investment and accelerate tourism.
Booming Property Market
Demand for property from both the domestic and foreign markets is soaring. The lowering of interest rates has increased domestic demand in the housing market as more Brazilians are able to afford homes. This has led to property prices appreciating significantly over the past six or seven years. Average capital appreciation on completed property in north east Brazil is 20% per annum with land purchases even more favourable. As a result the housing market is opening with more mortgage products becoming available and increased interest from foreign investors. The north east region is particularly popular with Brazil’s substantially growing middle class and foreign purchasers looking to buy second homes.
Property values are predicted to soar with the upcoming international events – 2014 FIFA Football World Cup and 2016 Olympics.
Brazil’s Thriving Economic Fundamentals
Brazil’s economy has gone from strength to strength over the past decade. Strong macroeconomic policies, the rediscovery of Brazil’s natural resources, social and economic reforms have helped increase exports and present Brazil as a viable investment destination in international markets, with a particularly bullish property market.
Economic performance is expected to continue on its strong growth trajectory with the International Monetary Fund (IMF) forecasting 4.1% GDP growth in 2011 and 3.6% in 2012 (Source: Bloomberg), following impressive GDP growth of 7.5% in 2010.
Investors are Flocking to Brazil
Brazil is under the watchful eye of the world’s investors and was awarded investment grade status in 2008 by Moody’s and Standard & Poor’s. Brazil is now considered a safe investment destination that is unlikely to falter (Source: The Financial Times). The investment grade ratings have placed Brazil on a foreign investment fast track with millions of foreign investment dollars flowing into the country annually. A combination of Brazil’s stable economy, falling interest rates and rising tourism are among the numerous factors that are attracting investors in increasing numbers to the market of Brazil.
Booming Northeast Brazil
Brazil’s Ministry of Tourism was set up as recently as 2003, but so far has invested more than US$736 million in the north east region alone improving airports, roads and drainage systems. The tourist industry in the region now accounts for 10% of all employment. Government figures expect international tourist visits to the region to increase to an impressive 20 million by 2013. This is in addition to the already large percentage of the 50 million annual Brazilian tourists that visit the region.
