Assessing the prospects of Brazil's rapidly developing economy, experts predict that by 2050 she will be among the five strongest in the world. It has been said more than once that one of the priorities of its development is tourism, because nature has generously endowed Brazil with the sun and hundreds of kilometers of beaches. And a few years ago, a real boom in the real estate market began in Brazil.
The demand for housing in Brazil is enormous. In a country with a population of 188 million people and the ninth level of consumption in the world, the middle class is now rapidly forming, Given that 50% of Brazilians are under 25, it is also the youngest nation with a "maturing" economy. In Brazil, buyers are waiting for a great income from renting out housing, and an increase in the value of property.
The objects in major coastal cities such as Rio de Janeiro, Sao Paulo, and resorts are in the greatest demand among foreign buyers, for example, in Natal, where a new international airport was recently opened and construction of several projects began. And according to Nick Marr, executive director of the web portal homesgofast.com , foreign buyers especially love Cumbuco beach near the city of Fortaleza (thanks to the influx of windsurfers), as well as the nearby town of Canoa Quabrada (due to the availability of land by the sea – from $10,000 per plot).
"A reasonable step would be to invest in a plot where you can easily build your own housing, – says Nick Marr. – There are no restrictions on the acquisition of land by foreigners, however, before you start buying, it is better to find a lawyer. There were many cases when local residents sold land to visitors that was absolutely unsuitable for construction."
Matt Glazier, head of the department for work with foreign buyers of the Winkworth development company, who represents projects in Sao Paulo and Rio de Janeiro, says: "As a rule, when buying real estate in Brazil, the buyer counts on tenants, not wanting his home to be empty. The rental potential of the domestic market is high, including because Brazilians prefer to spend their holidays in their country. As a result, property owners are insured against its downtime: tourists will always be."
In most cases, real estate is issued on the rights of freehold, and this significantly facilitates the procedure of buying property by a foreigner, who will only need to submit a CPF (registration number of an individual), and then pay the necessary taxes: 5% stamp duty, and 1% real estate tax. There is also a 15% tax on income from the increase in the value of real estate, which is paid when selling real estate. The mortgage system in Brazil is still being formed, and loans for foreigners are not being issued yet.
In an effort to attract foreign investment to the country, the Government headed by President Luiz Inacio Lula da Silva is taking a number of measures to reduce the rate of inflation to the lowest possible level. Other advantages of Brazil include the extremely low cost of living (the cost of living here is only 20% of the average European), low maintenance costs, as well as the independence of the economy.
Sean Golightly of International Property Estates gives this assessment of the country: "Brazilians are distinguished by the ability to manage their own economy. Brazil is getting richer from year to year by investing in its own development, and for real estate buyers this means an annual increase in the value of objects.
Argentina
Argentina recovered extremely quickly from the crisis of 1999-2002, which peaked in 2001, when the massive withdrawal of money from banks by depositors forced the government to freeze bank accounts, disgruntled citizens to take to the streets, and pilots of the state airline Aerolineas Argentina to go on strike. From 2002 to 2007, economic growth recovered and reached an annual 9%.
Liam Bailey of David Stanley Redfern believes that in the short term, the country's economy will not only continue its growth, but also strengthen. State regulation and competent management will allow the country to cope with inflation and ensure a smooth transition from extremely high GDP growth to moderate but stable indicators. On the other hand, if Brazil's economy is projected to become one of the five largest in the world, its huge trade turnover with Argentina will have a beneficial effect at the stage of its transition to sustainable growth.
As noted by Charlotte Williams from the company Someplace Else, from an investment point of view, four regions are the most attractive: the capital of Buenos Aires and its suburbs, the city of Mendoza, the Andes near the city of Bariloche and the southern part of the Patagonia region.
Real estate in Buenos Aires, where a third of the country's population lives, attracts investors with excellent financial prospects. "Over the past two years, the annual price growth has been 20-25%, but real estate here is still undervalued. We can predict that prices will increase by 15-20% in the next 3-5 years," says Charlotte Williams. "There is nothing surprising in the fact that foreigners flock to Buenos Aires: in the most prestigious areas of the capital, 1 sq. m costs only $ 2000-3200."
In addition to the impressive growth rates of housing prices, Buenos Aires can also boast excellent rental income, amounting to an average of 10% of the cost of the object annually. "Already today, funds are invested mainly in vacation properties with the prospect of renting in their spare time," says Liam Bailey.
According to Charlotte Williams, luxury apartments are very popular among tenants. "Apartments with an area of 250 sq. m. m in the center of Buenos Aires bring about 10% per year, some - 8-10%. In the suburbs, this figure is slightly lower – 6-8%," she adds.
A new trend has emerged on the outskirts of the capital in the last five years: large closed villages with golf clubs are in demand. Objects in such complexes are characterized by large size, elegance and comfort. The owners have the most modern infrastructure at their disposal, including a gym or sports center near the house. There are also schools and water polo clubs here, as Argentines are famous water polo fans.
Patagonia, Bariloche and Mendoza attract investors counting on rent and inspired by the rapid flourishing of the Argentine tourism industry.
The lively resort of Bariloche is located between the Andes and the plains of Patagonia. The South American elite loves to spend their holidays here, doing skiing in winter, and fishing and hiking in summer.
Tourists are becoming more and more in the vast, almost undeveloped expanses of Patagonia. As a rule, land plots for individual development are purchased here near closed water polo and country clubs with tennis courts and swimming pools, or ranches, which are called "estancias" here. The cost of a plot of 2000 sq. m. m – from $40,000 to $150,000, and among the buyers are such stars as Sylvester Stallone, Christopher Lambert, CNN founder Ted Turner, and others.
The city of Mendoza at the foot of the Andes tops the list of wine-growing regions of Argentina and is famous for its extensive olive plantations. The city is full of fountains and parks and is the starting point of numerous excursions around the country, the demand for vacation accommodation noticeably outweighs the supply.
Uruguay
Uruguay, which is located between Brazil, Argentina and the Atlantic Ocean, occupies a place in the list of those countries that everyone has heard about, but which rarely anyone aspires to visit. However, Brazilians and Argentines choose the first-class beaches of the city of Punta del Este, which resembles European resorts, as well as the capital of the country Montevideo.
Uruguay is called the French Riviera of South America: it is becoming an increasingly popular place of pilgrimage for tourists: in 2007, their number increased by 20%, including due to South Americans from remote countries. The popularity of the country is also growing among pensioners, primarily from the United States, who are attracted here by a mild climate, low living and real estate prices and scanty taxes: there is no capital gains and income tax, there are no restrictions on the import and export of capital, while ensuring complete confidentiality of banking transactions.
Real estate prices around Punta del Este are steadily rising, but still not so high - from $180,000 for a good object. An undeveloped mortgage system restricts buyers' access to financial instruments and protects the market from price spikes. The annual cost growth, according to estimates of a number of developers, is at least 11%.
As James Gonzalez, a market analysis specialist from Obelisk, notes, European investors are so far from Uruguay that they would not even think of looking at the local real estate market.
David Nichols, head of the investment department at EM Concepts, agrees with him: "The possibility of investing in Uruguayan real estate seems to be under the strictest secrecy. But the strong position of the national tourism industry creates an unprecedented demand for rental and secondary housing. And this is just the beginning, judging by the fact that Uruguay is increasingly in the spotlight."
There are a number of interesting projects in development. The Sugar Loaf Ocean Club complex, put up for sale by EM Concepts agency, is located on the pristine coast, just 5 minutes away. from the beach, 30 min. from Punta del Este and 45 min. from Montevideo and Carrasco International Airport. Detached luxury villas on a hill with two, three and four bedrooms and views of the beaches andThe town of Piriapolis costs from $180,000 to $710,000. The infrastructure includes a club, an infinity pool and a helipad. Rental income is estimated at 9-10% per year.
In the luxury real estate sector, the Department of International Real Estate of Sotheby's Auction house offers the Acqua project on white sandy beaches near the city of Piriapolis, which is not far from the already mentioned Punta del Este. The residential complex is located on the seashore and includes penthouses, villas and duplexes – all with huge swimming pools, as well as 22 residences with verandas. The minimum cost of the facility is $990,000, the project is scheduled to be commissioned in September this year.
The procedure for buying Uruguayan real estate by foreigners is quite simple. There are almost no restrictions here, and taxes are low. Stateless persons who have bought housing in Uruguay are guaranteed the right to private property. From July 1 of this year, the value added tax is 12%. Owners must also pay property tax – from 0.15 to 0.3%.
