When you hear the word ‘Brazil’, the first things that come to mind are usually blue skies, white sand and exotic food. But investment opportunity? Not so much. However, according to the latest data compiled by the Post Office, the British Pound has risen by more than 42 percent against the Brazilian Real over the last 12 months – which could make it something worth considering.
The Real has been having a hard time of late, tumbling 31 percent this year alone. Carlos A. Primo Braga, a professor of international political economy at Switzerland’s IMD Business School, explained to CNBC that the Real “has experienced one of the most dramatic depreciations among currencies from emerging economies over the last 12 months”. However, for anyone looking to buy internationally, this could provide the perfect opportunity to buy property at a great price.
According to leading developer Ritz-G5, who operate in the North East region of Brazil, there has definitely been an increase in interest from overseas investors looking to make the most of the current exchange rate advantage.
Ritz-G5’s CEO, Luiz Fernandes, says now is the right time to make a move: “we strongly believe that now is a great time to invest in Brazilian property due to both lower property prices and considerably undervalued Brazilian real.’
“There is significant interest in Brazil coming from overseas investors. In particular, over the last 11 years, foreign direct investment (FDI) figures showed a dramatic surge amounting to a 516% increase in the period from 2003 to 2014, with FDI amounting to 62.4 billion USD in 2014.
“With Brazil’s large housing deficit still very much present, there remains plenty of scope for further growth in the property sector over the coming years.”
For the price, Ritz-G5’s developments certainly look more attractive than anything in the UK. One development is inspired by the Atlantic Ocean, Costa Azul or ‘Blue Coast’, and is a new luxurious 168-apartment development in Petrópolis, one of the most exciting districts in Natal, and close to some of Brazil’s best beaches for soaking up the South American sunshine.
Complete with a bar, pool, gymnasium and spa, the development provides Costa Azul residents with an exclusive private retreat. Prices start from £43,028 for a 53m² unit, with apartments offering breathtaking views towards the Potengi River, the Atlantic Ocean and the Fort of the Three Wise Men, all fitted with contemporary décor and stylish appliances.
Another example of what money can buy in Brazil at the moment is its sister development, Majestic Village, which has recently won the highest 5-star award in the Best Mixed-use Development Americas category at the highly acclaimed Grand Final of the International Property Awards 2015. It has been built as a condo neighbourhood, surrounded by beautiful landscaped gardens, and include extensive facilities such as swimming pools, tennis courts and club, a children’s play area and a gym.
Looking to the future, analysts don’t see the Real staying low for long – the rate is likely to stay at a similar level for a just a year or two before rebounding. From an investment point of view, this could be the perfect time to make a move.
Miranda Wadham on 10/12/2015