Saturday, May 14, 2011
Dear Reader,
I'm back in Brazil, to take part in the ADIT (Association for Real Estate & Tourism Development) conference in Fortaleza. The conference finished Thursday, but I'm staying on another week to scout for properties. It was great to meet so many industry professionals...and to get their take on Brazil as a country for business and investment.
Here at Pathfinder, we like the big picture in Brazil. Just look at these facts:
Brazil is energy-independent. Petrobras just announced another 350 million barrel find of high-quality crude, in a field that contains as much as 80 billion barrels of oil. Brazil is #12 in the world for oil production. Brazil is also one of the top ethanol producers, including sugarcane ethanol to fuel cars. Around 90% of new cars made in Brazil in 2010 were flex-fuel, able to run on any mix of gasoline or ethanol. Meanwhile, 80% of the country's electricity comes from renewable sources (mainly hydropower).
It's rich in mineral reserves...including iron ore, bauxite, tin and copper. It has huge reserves of fresh water...12% of the world's reserves, in fact. It has vast tracts of agricultural land...and 25% more untapped agricultural land than the entire crop acreage of the US. It produces 80% of the world's orange juice, and is the top soy bean exporter.
Brazil's strong manufacturing sector produces cars, cement, electronics, steel, and petrochemicals. Brazil even has a satellite-launching center. This CNBC video visits the Embraer aircraft plant, which is the market leader in regional jets.
Brazil's trade surplus grew to $1.86 billion last month, totaling $5.03 billion for the first four months of this year.
Brazil's economy grew 7.5% in 2010. And that growing economy is growing the country's middle classes. An estimated 35 million people joined the middle class between 2003 and 2009. More than half the country's 190 million population now falls into the middle class bracket. By 2014, 20 million more Brazilians will become middle class. In turn, the middle class is fueling the economy.
Today, Brazil is the world's #5 market for computers, books and music...#4 for cars and refrigerators...#3 for cell phones, TVs, soft drinks and cosmetics...even #2 for executive jets.
In short, Brazil's new middle classes buy the same things we all buy when we have more money in our pockets. And that includes property...upgrading where we live to a better home in a nicer neighborhood, or buying a second home at the beach. Brazil's middle classes are driving Brazil's real estate market. And there is a way for you to profit from this.
On Brazil's northeast coast, the city of Fortaleza (and its middle classes) is growing faster than elsewhere in Brazil. And one neighborhood became so popular that today, you'd need deep pockets to afford a house here.
This neighborhood borders the city's central park, and is home to universities, two convention centers (an old one and a new one under construction), the city's courthouse and judicial center. More businesses are relocating here, too.
Thousands of people commute to this area every day to work or study. There is a big demand for affordable condos with good amenities, and modern finishes...to buy or to rent. And one project currently on the market offers 70 square meter (753 square feet) condos from 262,388 reals ($160,344). The condos have two bedrooms, two bathrooms, a study/third bedroom, and a parking space. Perfect for renting out to those middle class professionals working in the area...
And you can take advantage of a 3% discount on the purchase price if you reserve in the next 10 days. That cuts the start price for these condos to 254,516 reals ($155,524).
Pricing per square meter for this project runs around 4,200 reals ($2616) per square meter. On the other side of the park, you'd pay 7,000 reals ($4360) a meter...and up to 10,000 reals ($6229) along the city's boardwalk. This neighborhood is on the up...
Contact Daniel Neves, our local broker contact, here today to find out more about this opportunity.
Margaret Summerfield
Posted Under:
brazil, rental yield, appreciation potential
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