Minha Casa Minha Vida

Property investment is a universal dream. And it’s also one that is about to come true for millions of Brazilian families. Thanks to the government social housing programme, Brazil will see one million low-cost properties built by the end of 2010.

The Minha Casa Minha Vida (My Home, My Life) programme was launched just over a year ago. With the slogan “homes for families, wages for workers and development for Brazil” and a budget of R$34 billion, the project has the ambitious aim to reduce Brazil’s property shortage by 14%.

For the millions of Brazilians whose double obstacle of low wages and lack of housing means they cannot get a foot on the property ladder, Minha Casa Minha Vida “will be a dream come true”. The investment in one million properties in Brazil will provide 400,000 homes for families earning between zero and three times the minimum monthly wage (currently R$465). A further 400,000 houses will be built for families with salaries between three and six times the minimum wage in Brazil and 200,000 properties are allocated for families whose wages come between six and ten times the minimum wage.

Financing for this investment in property in Brazil comes from the government-owned Caixa bank. As sole financier for this massive project, Caixa provides funds for developers and mortgages for homeowners. For the buyer, mortgage terms are exceptionally favourable – for example, 100% finance is available for up to 30 years and interest rates for Brazilians earning up to 5 times the minimum wage come in at 5% (the current rate is 8.75%).

Mortgage payments are guaranteed for up to 36 months if new homeowners are unable to meet their monthly payments because of unemployment. Qualifying families are also eligible for exemptions or reductions on property taxes in Brazil.

The programme has been extremely popular and thousands of families throughout Brazil are putting their names down for a slice of the new low-cost housing. Unsurprisingly, Minha Casa Minha Vida projects in many parts of Brazil are heavily over-subscribed.

The impact on the Brazil construction industry is expected to be huge. Developers and building companies have the incentive of lower taxes on construction materials. The government has reduced taxation on a list of 30 materials used in construction to encourage real estate companies in Brazil to take on Minha Casa Minha Vida projects.

Social housing has been largely overlooked by property investment, most of which has preferred to focus on high or middle-end developments. With the advent of Minha Casa Minha Vida, this may change. According to the A.T. Kearney report, Recovering Markets, Revised Ambitions, “low-cost housing is a new frontier for developers in many emerging markets”. The report finds that social housing “represents the vast majority of needs in emerging markets”.

Low-cost housing programmes have a history of success. Schemes such as Phenix in France in the 1950s, MDC in the US in the 1970s and Preuksa in Thailand in the 1990s all provided homes for thousands. Minha Casa Minha Vida is fast following suit.

Described by the Brazil real estate giant, Gafisa as “one of the undoubted highlights of 2009 in the real estate sector”, Minha Casa Minha Vida provides unique opportunities for millions. And not only homeowners, but also developers and builders stand to reap huge benefits from this massive Brazil property investment scheme.

For more information on investing and to find out about Obelisk's latest projects, contact us on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinvestmentproperty.com.

Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at www.absoluteguideseries.com.

Obelisk Launches New Product

Looking for the ultimate in wealth creation? Like the sound of 170% returns over two years? If you also want a secure investment with an entry level of just €200,000, then Obelisk’s latest product ticks all your boxes.

At a time when bank interest rates are rock-bottom, bonds are not much better and equities are still rocky, high returns on investment are few and far between. And if you’re looking for peace of mind to back your money then investment opportunities are seriously thin on the ground. Until now. Obelisk’s new product offers that perfect combination – high returns, short-term investment, no hassle plus security.

The investment payouts are simplicity itself: at month 12, you receive a 10% dividend plus the return of your initial capital and then at month 24, you receive a further 60% dividend. So, if you invest €200,000, you get €210,000 back after 12 months – giving you that all-important liquidity – and then you get €120,000 more after 24 months. This makes a total return of €340,000. And the icing on the cake comes in the form of dividends that are locally tax-exempt.

This exciting – and unique – product is a departure from Obelisk’s traditional recommendations. But it comes with the usual Obelisk peace of mind provided by months of careful research and due diligence. The new product stays within property investment but with a difference – this time the investment is in a social housing scheme backed by a strong government. Add to this the fact that the same government is also running one of the world’s most successful economies, and you’ll agree that investments don’t come much securer.

If this sounds like the product your money has been looking for, contact Obelisk on 0034 952 820 319 or via email: info@obeliskinternational.com for more information. To find out more about Obelisk and our world of investment opportunities, take a look at our website – www.obeliskinvestmentproperty.com. Your money cannot afford not to.

Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at www.absoluteguideseries.com.

Industrial Production Booms in Brazil

Fired by its huge domestic market, Brazil’s industrial sector has just achieved its biggest drive since 2003. This together with 2% GDP growth in Q4 last year and the current big interest in Brazil equities and Brazil real estate bring Brazil to the forefront of the world stage. Not for nothing is Brazil expected to achieve one of the highest GDP growth figures in the world this year.

According to statistics released this week by the Brazilian Statistical Institute (IBGE), monthly industrial production in Brazil was up 1.5% in February. The highest increases came in the editing and printing sector, which almost doubled its production with a 97% hike; the pharmaceutical industry – currently in the spotlight for investment in Brazil – where production grew by 15.9%; and office and computer equipment with a rise of 15%.

Year-on-year figures are even more impressive. In February, industrial production rose by 18.4%. Compared with February 2009, 24 out of the 27 subsectors of industrial production improved their output. Within these subsectors, IBGE examines production figures for 755 products. 72% of these products increased their output since February 2009, the biggest drive in the industrial sector in Brazil since 2003.

Two areas within the industrial sector appear as highlights: capital goods and consumer goods. These two areas have seen massive hikes in production over the last year in Brazil, particularly construction materials and household appliances.
Brazil is currently undergoing an unparalleled construction boom, driven by major investment for the World Cup and Olympics, and a booming real estate sector – Brazil will build at least 13.7 million properties by 2016.

It therefore follows that there is huge demand for construction materials in Brazil. Production of construction materials went up almost 200% (196.9%) in the 12 months between February 2009 and February 2010. With one million homes due to be built in the low-cost property sector in Brazil by the end of this year, production of building materials will need to continue to rise to keep up with demand.

Sectors related to construction materials in Brazil also experienced important increases. The metallurgy sector – Brazil is a major producer of steel – raised production by 35.9%. The mining and quarrying industries, which include the extraction of materials such as sand and gravel for construction, increased their output by over 20%.

Like many emerging markets such as China and India, Brazil has a fast-growing middle class. This middle class enjoys increased purchasing power and is hungry for consumer goods. In Brazil, this desire to own material goods is reflected in the rise of the production of consumer items since February last year. Car manufacturing grew by 20% – Brazil is one of the few countries in the world to experience a booming automobile industry – and the production of household appliances went up by nearly 25% for white goods and by over 44% for televisions and DVDs.

For Obelisk, Brazil’s latest industrial production figures further confirm the potential behind investing in Brazil. As well as being on the brink of an unprecedented boom in construction and real estate, Brazil has numerous advantages. These include an economy that stood firm during the global recession, a booming domestic market and a vast supply of natural resources. Put all this together and Brazil undoubtedly offers some of the best investment opportunities available at the moment.

For more information on investing and to find out about Obelisk's latest projects, contact us on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinvestmentproperty.com.

Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at www.absoluteguideseries.com.

Responsible Investment

While ethical investment is not as well known or publicised as property investment or equities, it is growing in popularity. More and more investment portfolios now include a share in ethical investment.

The recent financial crisis has led many investors to take a closer look at funds and focus on where and how their money is invested. Not surprisingly, this has led to an increased demand for responsible investments. According to figures from the Investment Management Association, UK investors put £62.2 million into ethical investment funds during the last quarter of 2009.

This tendency looks set to continue; in a recent survey, Cooperative Financial Services found that 13% of investors were looking into ethical or sustainable funds for ISA allowances. And responsible investment isn’t just for the small investor – more and more high net worth individuals are also sourcing responsible funds for their money.

Lack of exposure means ethical investment is surrounded by myths. The biggest is that ethical investment is often a bad performer, a misconception that has been proven more than wrong by fund results during 2009. In its Responsible Investment & Wealth Management Opportunities report released late last year, EIRIS reveal that 90% of wealth managers said their responsible investment portfolios had the same or better results as other portfolios.

Ethical or responsible investment funds have been around for several decades. The first modern ethical mutual fund is believed to be the PAX fund, established in 1971 to avoid investments linked to the Vietnam War. Nowadays, there are hundreds of funds offering responsible investment in activities perceived as positive for the environment and/or society.

The increased profile of global warming has brought investment in green activities such as renewable energy or sustainable timber to the forefront. Ethical funds also invest in companies manufacturing energy saving products such as water meters or electric cars. Socially responsible investment aims to help society by choosing products such as low-cost housing projects or investing in companies who provide equal opportunities.

As well as investing in responsible ventures, ethical investment also goes out of its way to avoid so-called negative activities. These include the tobacco industry, nuclear power, arms dealing and child labour.

Some of the world’s largest institutional investors including a handful of stock exchanges such as the FTSE and Brazil’s Bovespa are signatories to the United Nations Principles for Responsible Investment agreement. Signatories are required to report their socio-environmental initiatives to the general public to facilitate information on responsible investment.

Bovespa signed the agreement earlier this month, reinforcing the commitment to information about responsible investment in Brazil. Bovespa has a history of initiatives to promote responsible investment – it was the first stock exchange in the world to sign the UN Global Compact in 2004 and it established the Corporate Sustainability Index in Brazil in 2005.

For more information on overseas property investment and to find out about Obelisk's latest projects, contact Obelisk on 0034 952 820 319.

Obelisk also produces its Absolute Guide Series which contains the most recent investment information on 30 of the world’s top emerging markets. They can be downloaded free of charge at www.absoluteguideseries.com.

Contact us via email: info@obeliskinternational.com or visit our website: www.obeliskinvestmentproperty.com.