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Rumba real estate

01.03.2008
Author: Kathy Sandler
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For a long time, Brazil has been spoken of as a country where the real estate market is about to break through and become a new gold mine for investors. And indeed, the economic situation in the country is stable, real estate is gradually becoming more expensive, landscapes, as before, are surprisingly beautiful, and the climate is magnificent. But will the country justify its expectations?
Real estate buyers' interest in Brazil intensified at the beginning of the decade. It was then that the abbreviation BRIC (Brazil, Russia, India and China) appeared in the report of the investment bank Goldman Sachs, and data on the pace of development of these countries became the focus of experts' attention. Since then, predictions have been made more than once that by 2050 this four will become the world's economic dominant. From the point of view of real estate markets, Brazil is currently a clear favorite among the BRIC countries.

Why buy
Experts in emerging markets from The Overseas Property Agency (TOPA), offering their clients housing in Brazil, are sure that there are many reasons to purchase real estate in this country. Among them are gradually decreasing interest rates on bank mortgages and well–controlled government inflation, which in 2006 amounted to 3.1%. "There is a possibility that the ongoing financial reforms and economic stability will cause a significant reduction in interest rates in Brazil," TOPA believes. – Today there is practically no mortgage lending in the country, but with a decrease in interest rates, a credit boom will begin and, as a result, real estate will rise in price."
The international real estate group Barrasford and Bird Worldwide also expects prices to rise: "Capital gains for the year should reach from 15 to 20% of the value of real estate, judging by the state of the Brazilian market at the moment."
In addition, economic growth is only one of the factors influencing the development of the tourism business and the summer housing market. Another necessary condition is the presence of a coastline, warm water and magnificent nature, which Brazil does not occupy. In addition, the government skillfully uses these assets to attract vacationers. According to the National Tourism Plan, 9 million people will come to the country's resorts annually, which will bring the country $8 billion, and the number of travelers within the country will grow to 65 million per year. All this will stimulate the real estate and rental housing markets.

What to buy
It remains only to decide where to begin the search for a personal paradise in Brazil. To do this, you should go to the northeast of the country, to the shores of the Atlantic Ocean, where the air and water temperatures are ideal at any time of the year. This area, consisting of 9 states, is now leading the growth in real estate prices: there is a sharp surge in construction and the influx of a new generation of investors.
On the northeast coast of Brazil, where there are many popular resorts among locals, active construction has been launched in recent years. The city of Natal– the capital of the state of Rio Grande do Norte, is the most attractive for tourists. Its role in the region is also high due to the nearby Augusto Severo International Airport. In 2008, another international airport will open nearby – Sao Gonzalo Do Amarante (Sao Gonzalo Do Amarante), which will be able to accommodate about 5 million passengers.
Recently, Natal has become the center of an area stretching along the coast, where new complexes are being built to meet the growing international and local demand for real estate for summer holidays. At a distance of a 20-minute drive north from Natal, the Natal Ocean Club complex is being built – an 8-hectare tropical garden, including villas, detached houses and apartments with ocean views and 300-meter private beaches. A spa center, a tennis club and a leisure center will be built on the territory of the complex, the opening is scheduled for 2009. The cost of real estate – from $230,000.
The Jacuma Resort complex, 25 km north of Natal near the city of Ceara-Mirim, according to the project, will include 5 buildings with apartments, bungalows for two families and isolated villas located along the coast. Prices from Overseas Property Agency – from $216,000 for a villa and $110,000 for an apartment.
Located a little further north, Maracajau beach is famous for its "parrachos" – coral reefs. The Beach Villas complex is located on the first line of the sea and includes 11 houses of different designs – with three bedrooms and a swimming pool. The Overseas Property Agency company offers objects from $340,000. A deposit of $4000 is required and payment of 30% of the cost within 8 months after booking. An alternative may be the offer of the company Property Frontiers – villas and apartments in the resort of Porto dos Corais. Nearby there is a spa center, a health club, a restaurant, a bar and other facilities that create favorable conditions for recreation. The cost of apartments starts from $60,000.
The town of Pipa, south of Natal, attracts many vacationers with a beautiful beach, one of the top ten in the country, an abundance of restaurants and a bustling nightlife. Once it was discovered by surfers who were amazed by the beauty of the coastline, and soon Pipa became the main destination for Brazilian tourists thanks to low prices and a wide range of rental offers. The Experience International company offers two–bedroom apartments for $105,000, a three-bedroom villa - at a price of $235 000. The new Pipa Paradise complex consists of 178 residences and outdoor swimming pools, the Praia d'amore Beach is at the service of those who like to swim in the sea.
Pipa Hills is a small complex of 52 villas located 600 m from the beach and 200 m from the city center. Each villa has 3 bedrooms and a veranda for a comfortable evening rest. There are also 3 swimming pools, a bar and a barbecue area. Only 13% of the territory was built up, the rest of the land was bought on the terms of the "waiting right" and after a while will be allocated for green zones. The cost of renting a villa is $50 per day, and, according to preliminary estimates, the annual income from renting out objects will amount to 20% of the value of the property when it is occupied by 40%, although it is assumed that the popularity of this housing will increase. Prices at Gem Estates for fully furnished villas start at $250,000.
The city of Fortaleza is considered the capital of the state of Ceara, which borders the state of Rio Grande do Norte, and is famous for 3,000 hours of sunshine a year, a temperature of +28 ° C in water and on land and an active nightlife. Gem Estates sells apartments in condominiums at a price of $130,000 – in the village of Catu Residence Yacht and Spa south of Fortaleza. The lagoon will also have a spa, a shopping center, an entertainment complex and a club beach. Completion of construction is planned for 2011.
The state of Alagoas in the northeast is also a promising area of domestic tourism, where there is everything you need: beaches, coral reefs and houses on the coast. Maceio, the largest city here, has invested about $420 million in the development of the region's tourist infrastructure. Barrasford and Bird Worldwide offers furnished one-bedroom apartments with a balcony and parking space at a price of $55,000. The 12-storey Anthurium complex is located near the coast and is an example of modern Brazilian architecture. An alternative is an apartment from the construction company Leiria at the same price.
Near the city of Bahia, 74 km north of Salvador, there is the Costa do Sauipe resort, which is developing thanks to the Odebrecht Empreendimentos Imobiliarios company. The Sauipe Golf Terraces complex is the fourth in a growing resort, these are houses with terraces, bungalows and penthouses 6 km from the white sandy beaches. It offers views of the sea and the 18-hole golf course. The complex has its own club, spa and fitness center, where children can play mini golf, swimming pools, including a children's pool, and a cinema.
The objects are distinguished by stylish interior design and architectural perfection. The open layout and windows facing opposite sides allow you to enjoy the views as much as possible. Prices for apartments with an area of 108 sq. m. m and two bedrooms start at $185,000.

How to buy
In Brazil, there are no restrictions on the ownership of property for foreigners. The buyer needs to get a CPF number, an analogue of a social number, to open an account and buy real estate. To purchase a second home, the buyer must request a certificate of the owners' history (Certidao de Onus Reais). Buyers of real estate under construction should check the licenses for all houses and land registration. It is worth opening a small non-refundable deposit in the name of the seller, and after the contract is drawn up and signed, the property can be registered.
James Anderson is buying a three-bedroom villa in the Pipa Hills complex with the help of Gem Estates. He chose a country for a long time and settled on Brazil, whose economy is developing and the real estate market is growing. His main goal is profit. In Pipa, renting brings up to 30 to 40% of the value of the property. The income is especially high during the carnival in February and March, as well as during the summer holidays. When the construction of the villa is completed and all contracts are signed, James will pay from $230,000 to $250,000, of which almost 10% are taxes and fees.
Knowing that there are legal and political risks when buying real estate in Brazil, James Anderson has spent a lot of effort to make sure that his investment is reliable. For example, he wanted to find out who the owner of the nearby territories is and whether there is a possibility of building around his complex.
Most of the new buildings are transferred to the owner's right, however, there are several details of the registration of property rights that need to be checked with your lawyer. James Anderson advises potential buyers to be aware that there isthe possibility that in the future the conditions for investing in real estate may change (although they have been quite stable lately). He also says that the local building standards are high, but you should not expect the construction of luxury penthouses here, as in Dubai. In addition, not everyone understands English here – let alone Russian!

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