Anthony Fernandes, director of SPC Overseas says: “Brazil Buyers Beware! There are a huge number of projects springing up in Brazil and many simply don’t make the investment grade”.

“For every 15 developments that we are asked to promote by developers, just one makes it into our property portfolio. Before we promote any development, it has to go through our thorough due diligence process to ensure that it will meet and satisfy the objectives of our clients and that our clients’ best interests are protected.”

“Buying property in Brazil and investing in Brazil is not right for everyone. We try to assist clients to work this out for themselves early on in the process. If a bank guarantee or a mortgage is important to them then they won’t want to invest in Brazil. Similarly, potential buyers mustn’t be wooed by pie in the sky plans, visions and exaggerated projected growth. It’s all very much in the detail. “

The AIPP (Association for International Property Professionals) Award for Best Agent 2011 recognises outstanding customer service at all stages of the buying process: before, during and after sales. AIPP felt that SPC Overseas stood out from the crowd due to the care it takes to guide potential investors through what can be perceived as a high risk market that it knows extremely well.
The AIPP judges said: “The winner demonstrated a thorough understanding of the entire buying process. They have a clear process in place to help their buyers negotiate an emerging market, and they really stress the need for external and independent advisors”.

Anthony Fernandes continues: “We deal with serious investors looking to make real returns. If we feel we are not right for each other, we will say so. We will always try to point clients in the direction of someone who is better placed to assist them. We are also acutely aware that clients might be able to buy the same product through other agents, but we are told that our local market knowledge, attention to detail and customer service set us apart.”

This straightforward approach cutting out ‘the fluff’ has earned SPC Overseas an unrivalled reputation. Andy Rhead living in The Netherlands is just one of scores of people who liked SPC Overseas’ style. He says: “I found SPC Overseas to be honest and professional and his free 30 minute introductory call was particularly useful. I wasn’t looking to invest a great deal of money as I didn’t have a large amount so Anthony tailored the call to my financial position. I didn’t find him to be a ‘pushy salesman’ just gave me the facts and let me make my own mind up, but whenever I needed to ask for his advice, he was always happy to help. I found his personal touch reassuring and I liked the fact he had met the developers on the Brazil side.”

www.spc-overseas.com – smart property consulting

For further information please contact:
Martine James, SPC Overseas on +34 952 781 000 or 0844 598 2929 (UK local rate) martine@spc-overseas.com

Seldom is a bad word written about property in Brazil, unless it is followed up with words of potential and encouragement on facing the challenges ahead.

It is expected that the economy will be recorded to have grown by some 7.5% in 2010, impressive stuff when much of the western world is struggling with huge budget deficits and struggling economies.  

Brazil of course has it own challenges: education, infrastructure, corruption, crime, strong currency just to name a few –“here comes the but!”, but these are challenges that are envied worldwide, as the sleeping giant seems to have finally awoken. With the foundations of the package of economic policy reforms in the “Real Plan” put in place by twice President Cardoso (1995 -2002) and largely continued by the popular Lula da Silva, President Dilma Rouseff couldn’t have taken control at a better time. Some politicians comment that the train is moving too fast now, for anyone to derail regardless of their political slant.

With a housing deficit of some eight million properties, Brazil’s housing market is expected to continue to grow until at least 2025, when based on current market trends supply of Brazil property will finally catch up with demand. (Source FGV) The government’s popular Minha Casa Minha Vida initiative implemented under Lula regime, well financed and underwritten by State Bank Caixa Economica is planned to make a dent in the deficit by three million homes by 2014. C-Class housing projects for the booming middle class are being developed across the country to and are closely being eyed by investors.

Unlike high profile property markets that have been fuelled by speculators, the demand in Brazil is almost entirely local. That has to be a positive thing for investors as there is clear local demand across the country and that means an exit strategy – key for any successful property investment.

However, with rising inflation (2% over the Central Bank’s 4.5% target) due to rising consumer credit and investment, the measure has been taken to steady the economic growth.

Rising foreign investment has strengthened the Reais – Brazil’s currency. In an effort to slow down the economy, President Rouseff anounced a decrease in government budget of 50 Bn Reais, but in real terms government spending will still grow.

The Brazilian economy is estimated to have grown 7.5% in 2010.

SPC comment:
Increasing interest rates usually have a negitive impact on house sales, or at least that is the way it is in Europe.  However, with a shortage of property in Brazil, specifically first homes and easy access to finance for locals which is still viewed as affordable, this is likely to have little impact on residential sales. The local residential housing sector in Brazil is booming and this is the focus for many investors interested in Brazil property.

Source: FT.com

Despite all the obvious allure of the tropical beach resorts, it is Brazil’s less glamorous local first residence market that is currently catching the eyes of the savvy investors examining property in Brazil.

As a consequence of the strong economy, prosperity levels are rising fast in Brazil, with sharp increases in housing demand.  In just two years, 23 million people have risen to prosperity level C (middle class), which now counts 85+ million people. This middle class has a monthly income between 2 and 10 times the official minimum wage.  With insufficient first home housing stock to satisfy local demand, Brazil currently has an estimated housing deficit of a minimum of 8 million properties.  The middle classes are expected to purchase between 1,000,000 and 1,200,000 units per year until 2015 and the well publicised Minha Casa Minha Vida programme is planned to deliver 3 million homes by 2014.

Further fuelling demand is the fact that for mortagages have only been available to residents for the past 3 years.  Mortgages account for only 2% of GDP in Brazil, versus 65% in the United States and 74% in the UK, so consumers aren’t feeling the effects of credit squeeze. Massive growth in this sector means that domestic mortgages are predicted to increase by up to 600% by 2014. With this in mind it is clear that the first residence market within Brazil’s major cities is a major investment opportunity and no region has seen faster growth that the North East.  As an investor, this means there is an opportunity to invest in well located local property that has a well defined target market and exit strategy, attracting middle class tenants and buyers. 

While the tourist property in Brazil is still popular with investors and those seeking a beautiful holiday home with additional rental income, there is no doubt that the current global slowdown has had an impact on this market.  Investors buying beach style condo resorts need to view this as a longer term investment. Carefully selected land in Brazil still offers investors excellent potential returns, but great caution needs to be excercised on selecting the right location.  In the short-term, domestic demand maintains a dominant position given Brazil’s current economic situation. 

Investing in first home, residential property in Brazil is a safe and very profitable strategy, with high returns and high demand for such properties.

SPC Overseas, the Brazil property specialist agency, has been shortlisted by an independent panel of judges at AIPP (Association of Independent Property Professionals) for an award in the Best Agent category focussing on a single country.

In response to the selection, Anthony Fernandes – Founder and Director of SPC Overseas said,
“I am delighted to be recognised by AIPP and our clients for the level of service and attention to detail we extend to those considering investing property in Brazil”.

SPC Overseas delivers clients an unrivalled level of customer service when it comes to looking at property for sale in Brazil and also land in Brazil.  Transparency, honesty and integrity are the foundations on which the business is built and this is relflected in the consultative approach to dealing with client enquiries.

Fernandes continues, “ Of course we would like to awarded the top spot, but being shortlisted by AIPP already differentiates us from the plethora of agents out there”.

The AIPP Awards ceremony will take place on Friday 11^th March at London’s Earls Court. The winners will be announced on the main stage of A Place in the Sun Live, with the awards presentation by Jonnie Irwin, presenter of A Place in the Sun: Home or Away? ]]> http://www.spc-overseas.com/wordpress/spc-overseas-is-shortlisted-in-best-agent-category-by-aipp/feed/ 0 http://www.spc-overseas.com/wordpress/brazil-property-financing-and-mortgages/ http://www.spc-overseas.com/wordpress/brazil-property-financing-and-mortgages/#comments Tue, 15 Feb 2011 23:36:10 +0000 Anthony Fernandes http://www.spc-overseas.com/wordpress/?p=320 In 2007, for the first time in 25 years mortgages became available to residents buying property in Brazil. Before then, Brazil’s poor and lower middle class had little access to credit and the astronomical interest rates made repayments almost impossible.

Along with the shortage of homes across the country, access to mortgage finance has fuelled consumer demand and has created the construction boom.  Massive growth in this sector means that domestic mortgages are predicted to increase by up to 600% by 2014. Banco do Brazil recently announced that it will double their loan book in 2011 from 3 billion Reais to 6 billion Reais!

The prospect of buying a small home is now a reality for millions of Brazilians, but mortgages are only available to Brazilian residents on ‘key ready’ property.  

As an investor, this means there is an opportunity to invest in well located off plan property in Brazil that has a well defined target market and exit strategy, by selling to middle class local residents on completion, who can get access to finance.

Mortgages in Brazil are not yet available for non-residents. Pre-credit crunch, HSBC announced in early 2008 that it will offer mortgages to its ‘premier customers’ and it was thought likely that other banks would follow.  This hasn’t happened yet in earnest, although several international banks are closely reviewing how they might offer financing in Brazil to non-residents, as they see Brazil as a huge growth market.  At present, the Brazilian local banks have little interest in offering non-residents mortgages, as they have enormous local demand to focus on which will be more profitable for them.

Eventually, market forces as ever will prevail and it is probable that in the coming years various property financing options will be available in Brazil to non-residents. International investors need to be mindful that finance is not guaranteed at this time and that they should ensure they have alternative arrangements available to them for raising finance for property purchases. A few unscrupulous developers and agents have launched off plan projects targeting international investors, luring them with claims that there will be “guaranteed  finance on completion”.  The writer suggests that this is more a sales pitch and at present no such guarantees exist.

One thing for certain, is that as soon as financing does become readily available to non-residents there will be a huge increase in the number of international buyers and of course this will impact the supply and demand curve forcing prices to go up.

According to Bendine, the goal is ‘loyal customers for the bank’. “We do not imagine competing on the same level as La Caixa. We estimate a growth, but not to compete with La Caixa. We can act in a complementary way”, he said.

EXPANSION

The President of the Banco do Brasil said that next month they will acquire a U.S. bank that according to him, will be on the “east coast”. Also being studied is the role of the bank on the African continent through a partnership with the Banco Espirito Santo. Source: Folha.com

Comment from SPC Overseas: This news emphasizes the scale of the opportunity in investing in Brazil property and in particular the local and popular housing.  Investors need to not only look at Minha Casa, Minha Vida opportunities, but also the lower middle class housing sectors of the Brazil property market.

She continued, “Many things have improved in Brazil, but this is just the beginning of a new era,”

She also expressed the need to simplify the countries tax system and invest in modernising infrastructure ahead of the upcoming 2014 FIFA World Cup and 2116 Olymics.

With rising price inflation and continued strengthening of the currency, Brazil has it’s own challenges, but these are of course very different from those in the US and in UK for example at the present time. Brazil’s economy is anticipated to have grown by 7-8% in 2010.

The daughter of a Bulgarian immigrant, Rouseff was jailed for 3 years for her part in the resistance to Brazil’s 1964-85 dictatorship run by army chief of staff, Marshal Humberto Castelo Branco and tortured by her military captors. Several of her former cellmates were present at her inauguration.

Source: ft.com

SPC Comment:
With outgoing President Lula da Silva having enjoyed all time high popularity ratings for a President, Rouseff has a difficult act to follow. However, she seems intent to build on the progress and economic policies that Lula has made, which themselves were based on the solid foundations put in place by his predicessor Fernando Henrique Cardoso. This ongoing stability is viewed as good news for international investors looking into property in Brazil and land in Brazil.

Back in September the Secretary of Infrastructure of the State of Rio Grande do Norte and the Secretary of Urban Mobility of Natal had requested funds from the federal government for the construction of new and improved roads and bus routes connecting the new airport of Sao Gonçalo de Amarante, the airport of Augusto Severo, the hotels of Ponta Negra and the Via Costeira to the area where the new stadium is to be built in preparation for the 2014 FIFA world cup. Yesterday this was unofficially confirmed to be approved.

The improvements to be made to the roads and related infrastructure in Natal over the next 2 years in preparation for the 2014 FIFA World Cup have been announced. R$ 387.5 million has been allocated for the following improvements to be made:

· Connection of the BR-406 to the new Sao Gonçalo do Amarante airport (est. R$ 15m)

· Structural corridor from the west to the BR-226 (est. R$ 39.5m)

· Roadway in front of the city centre (R$ 36.1m)

· Geometric restructuring of the Mor Gouveia (R$ 23m)

· Connection of the Mor Gouveia road with Prudente de Morais (R$ 26.1m)

· Connection of the Prudente de Morais to the Raimundo Chaves (R$ 18.2m)

· Connection of the Prudente de Morais to Lima e Silva (R$ 75.4m)

· Connection of Lima e Silva to Romualdo Galvao (R$ 21.6m)

· Connection of Salgado Filho to Marginal da Avenida (R$ 9.2m)

· Connection of Salgado Filho to Mor Gouveia (R$ 28.3m)

· Connection of Roberto Freire to Aryton Senna (R$ 20.4m)

· Connection of Roberto Freire to Missionary Gunnar Vingren (R$ 20.8m)

· Connection of Roberto Freire to the Via Costeira (R$ 15m)

· Implementation of boarding platforms for loading of passengers (R$ 13.3m)

· Sidewalks, walkways and signage (R$ 15m)

· Elongation of Prudente, connection to Augusto Severo and Arena das Dunas (R$ 10.5m)

Perhaps you are not familiar with the names of all the roads, or their location, but R$ 387.5 million / 137.6 million GBP/ 146.2 million Euros has been allocated. For more information on plans for Natal for the 2014 FIFA World Cup, visit this link (in Portuguese): http://www.copa2014.org.br/cidades-sedes/NATAL/