5th Best City to Invest in Brazil.Top spot in N.E Brazil= Natal
Faltering economy; political uncertainty; interest, taxes and rising inflation. As much as the economic scene points to a contraction in the volume of investments in Brazil, the reality of the housing market – especially in Rio Grande do Norte – looks a bit different. Without ignoring the difficulties, this sector of business continues to attract inward investment. Recently appointed as the fifth best city in Brazil to invest in real estate,Natal lives up to the privileged position in the national ranking
In the list published by Exame magazine, specializing in economics research, bearing the results of a survey conducted by consulting firm Prospects Intelligence Real Estate, Natal was defined as a great place for investment in real estate of all kinds.Rather than considering the valuation of real estate and the average square meter price of cities, which shows a reflection of the business already implemented,the researchers chose to investigate this demand tracing future trends.The study used factors that measure several variables such as per capita income, education levels,number of companies with a strong presence in the market and housing deficit.After preparing the data,a list of 100 municipalities were compiled showing the potential for investment in real estate.
Natal appears as the fifth city in the ranking, where the other top 4 positions are dominated by the cities of São Paulo. Considering only the country’s Northeast, Natal comes in pole position ahead of Maceió (eighth in the overall list) and Joao Pessoa (the tenth best placed). Although this research has come to light less than a month ago,it has tuned investor groups onto the advantages of investing in Natal.On example is Ritz,a UK based, multinational group present in the RN since 2008. According to the company’s marketing director in Brazil Fernando Lessa, the developer has been analyzing the local market for some time and launched the first venture in Natal in 2010. With properties in an advanced pace of construction, the site should be comleted by next summer. The group is very satisfied with the return achieved after investments in the state. “Natal is a city whose primary characteristic is attractiveness. The city has a very strong migratory pull, which gives an excellent profile for property investment, independent of fluctuations in the financial market. It is definitely not a harvest of seasonal opportunities, “Another big comparative advantage is the increased purchasing power of the average citizen of Natal – according to data collected by Prospects, the average income of the economically active population (EAP) has six times the minimum wage,(close to R$ 5000) This flows into the formation of a strong demand for prime assets,reflecting the search for higher status.
Even with this downturn of the Brazilian economy, this conjunction of variables makes the local market attractive,investment wise. “We know there is saturation of some products in the property market, but at the same time, there are other possibilities that follow generating a very high demand, for example,in the case of condominiums where we are designing and launching new ventures in the capital, “stated Fernando Lessa.
Condominiums continue to attract high levels of demand due to two distinct factors but complementary, the reality of the country.On one hand, the struggling public safety scenario, generating a market for structures that will fill the deficit left by the Government, providing tranquility to the consuming public; and a search for a better quality of life.The company plan to launch a complex of up-scale residential condominiums on the south side of the city which includes the conurbation between the city of Natal and Parnamirim. The Majestic Village will occupy a total area of 75 hectares “We will have markets, schools, clinics plus other kinds of integrated services for the residents without traffic,noise,pollution and general chaos of the city”the focus of the market is quality of life, “he testified. The proposal is not solely aimed at class A and A +. The current trend, according to Ritz, is to offer a differentiated product with high standard of structure, yet affordable to the middle class. The first stage of the condominium will focus on that segment of the population, with landplots on average 200m2 and starting price of around R$ 80,000 thousand, an amount that can be financed up to 10 years. “Property will always be a safe investment, especially in a city like Natal. Certain areas have potential for very high value appreciation, reaching 200%within 4-5 years”
In analysis of the current national economic times and Natal property market, the president of the Industry Union of the State Construction (Sinduscon / RN), Arnaldo Gaspar Junior, outlined encouraging prospects for local economic development . According to Gaspar, considering the traditional research – the Sinduscon disclose quarterly results, based on the Sales Speed Index (IVV), which marks the difference between supply and demand for real estate – the present is excellent for investment by the consuming public even if the national economy is faltering, as prices are very low, due to the excess of supply. “Th new reasearch findings(in Exame) use a different methodology,but have injected new and interesting view on the market, showing real and current investment opportunities in the business community,” he said.
Another issue addressed by the President of Sinduscon are foreign exchange transactions that have occurred recently. According to Gaspar, the Brazilian currency is returning to a real level against the dollar, after a long period of recovery forced by the federal government, the country will again be very attractive to the international market, especially the Europeans, going through a moment of recovery in financial liquidity. “I see great possibilities of this happening. Better yet, if the projections are realized,Natal will come out way ahead, just judging on the features highlighted in the survey reported in “Exame”. I am very optimistic about the combination of factors which indicate that we have everything to go through a real investment boom “he said. Gaspar, however, warned of the need for the public administration be prepared to absorb this high substantial investments.
According to him, it is necessary to reduce the bureaucracy of licensing and paperwork for new ventures, which has already damaged project viability in RN in previous years. “We need to optimize the work of the agencies responsible to define the role of each to avoid bureaucratic obstacles harmful to the state’s economic development. The (Municipal Department of Environment and Urbanism) Semurb, the (Institute for Sustainable Development and Environment) Idema and (Brazilian Institute of Environment and Renewable Natural Resources) Ibama need to integrate actions to facilitate permitting “he said. “The time to buy is now” This optimistic outlook of Arnaldo Gaspar Junior on the local market was seconded by Sílvio Bezerra, former president of Sinduscon and current delegate representative of the entity with the Federation of Rio Grande do Norte Industries (FIERN), and President of one of the major construction companies in the state, Ecocil. He explains this by results achieved recently,
The timing is excellent for those looking to invest in real estate. “It is clear that there is a varied offer of real estate. Of course, some segments are over-supplied, but there are niches that are not being promoted. I conclude, therefore, that the time is favorable for investments. I do not know what happens in other cities, but I believe the industry has grown here, as shown in Search Examination, and the time to buy is now, “he advised. The businessman said that index that most caught his eye was Natal’s housing deficit of 34.18%. As Bezerra explained, this indicator shows the number of households that the market could build to meet the existing demand. Simply put, it is the percentage of the population that has no home.
“The deficit is great because not everyone has afford to buy. Moreover, there is not enough credit for this sector to meet demand. If there are people being born, growing population, in general, this leads to the search for housing. Increased demand, purchasing power, this means that there is movement, “he said. The executive also highlighted the per capita income and extremely competitive prices compared to other cities as a spread.While last year Ecocil launched just one new development, there are already four scheduled for this year.
A report published by Exame magazine in early February unveiled a new horizon of possibilities for the national housing market. As for the choice of spectrum municipalities with populations of one million inhabitants, the board of Prospects intention is to seek expanding markets, fostering substantial and profitable investments, rather than places where the sector has reached a high level of saturation.
According to the director of new business consulting, Cristiano Rabelo, the main purpose of the initiative is to signal and drive business to a broader look at emerging markets, enabling a better basis in the choice of investments. As explained by the expert, the study released last February is less dependent on fluctuations in the financial market, since it uses a wide range of variables to generate the attractiveness index for each municipality. “To demonstrate the real potential of these regions, cross information collected from the georeferencing systems to Datasus, Ministry of Labour, IBGE … in short, was made a collection of economic and social indicators in order to trace a reliable profile of the real estate sector in the country, “Rabelo explained that disclosure of the list of the top 100 cities is only the initial stage of the work.Here are the ten best cities to invest in real estatel
1 – São Bernardo do Campo / SP – 0.820. Housing deficit of 27.83%. Average of seven salaries
2 – Campo Grande / MS – 0.767. Housing deficit of 29.24%. Average of six salaries.
3 – Santo André / SP – 0.767. Housing deficit of 29.71%. Average of seven salaries.
4 – Osasco / SP – 0.746. Housing deficit of 33.82%. Average of six salaries.
5 – Natal / RN – 0.739. Housing deficit of 34.18%. Average of six salaries.
6 – Ribeirão Preto / SP – 0.733. Housing deficit of 31.81%. Average of seven salaries.
7 – São José dos Campos / SP – 0.731. Housing deficit of 33.07%. Average of seven salaries.
8 – Maceió / AL – 0.721. Housing deficit of 31.82%. Average of five salaries.
9 – Niterói / RJ – 0.716. Housing deficit of 28.91%. 10 Average salaries.
10 – João Pessoa / PB – 0.701. Housing deficit of 33.30%. Average of five salaries.
Mike is long-term resident,business owner and property investor in the sunshine city of Natal in North-East Brazil.
Please contact him for a free download of his bestselling book on Amazon Kindle;
“The Essential Guide to Land Investment in Brazil for 2015 and Beyond”
http://www.amazon.com/Essential-Guide-Investment-Brazil-Beyond-ebook/dp/B00QPFSVYG
Mike Smith
BRAZIL ǀ Real Estate Investment Consultant/
Consultor de Investimento Imobiliário
Office: +55(84) 3345-4406
Email: mikesmithbrazil@gmail
Skype ID: mikebrazilbeachhouse
