Brazil properties

The primary challenge faced by Brazil is the potential threat to its stability posed by internal socio-economic divisions. Brazil has not yet satisfactorily addressed the gulf between the layer of society benefiting from its emergent wealth and the larger population that suffers from extreme poverty.

As the implications of these conditions are difficult to quantify as a tangible risk, foreign investors in Brazil investment property may be better served in areas other than the primary urban markets which would normally be the focus of attention. The sustainability of housing price growth in major cities, while viable, carries with it an unacceptable exposure to risk that cannot, as in certain other markets, be offset or strategically managed.

In secondary development regions however, and in tourism-driven areas in particular, the domestic growth opportunities are spread across a broader spectrum of the population, which translates into greater socio-economic stability, and dramatically lower crime rates. The bolstering of demand by international tourists acts as an additional assurance, and offers low-correlated market stimuli, which should ensure sustainable growth within specified micro locations.

Research points to the northeast, and in particular the area around Natal, for maximum growth potential in this sector. The combination of strong underlying economic indicators, projected growth in tourism, and the construction of the new international airport, translates into an opportunity to acquire an asset that benefits from the exceptionally high performance profile of Brazil with low risk exposure.

The northeast region of Brazil is therefore one of only a select few markets following the high growth pattern of emerging markets yet exhibiting the low risk levels more commonly associated with developed markets. The potential of the region is exceptional; however this potential coupled with the constrained supply will quickly convert into a limited timeframe within which to purchase in the best locations. Investors are advised to move quickly to take advantage of what is likely to be proven a small window of opportunity.

One excellent example of a development in the northeast of Brazil is Natal Ocean Club which has just been backed by major investment and world leading hotel management group and as such is experiencing a massive price increase of 53% highlighting the fact that those early investors have benefited greatly by identifying the investment opportunity in its early stages.