North East Brazilian Investment Guaranteed | Obelisk International

The Brazilian President has confirmed the government’s commitment to investment in north east Brazil. The investment total will run to R$120.4 billion.

President Dilma Rousseff visited north east Brazil this week to introduce a new bill for the region. For Dilma, the bill defines “the new north east” and guarantees Brazilian investments in this part of the country.

Through the R$120.4 billion investment sum, the government will maintain conditions for the economy in north east Brazil to grow at higher rates than the rest of the country.

One of the poorer regions of Brazil, the north east has recently seen high economic growth fuelled by sectors such as construction and real estate. Last year’s increase in civil construction in Brazil’s north east was one of the highest in the country and the area has been earmarked by top Brazilian real estate companies for expansion.

Brazilian Government Investment Priorities

For Dilma, several conditions are necessary for north east Brazil to make further economic progress. Public investment in infrastructure is a top priority, particularly for the 2014 World Cup. Job creation is another concern along with better income distribution.

Although the Brazilian government has just approved a R$50 billion budget cut, Dilma has pledged that she will maintain investment in north east Brazil. Investment in flagship social programmes such as Minha Casa Minha Vida (Brazil’s social housing scheme and one of the world’s largest real estate investments) and infrastructure improvements will remain in place.

Favourable Environment for Investment

North east Brazil, one of the current hot spots for investment, plans to nurture its favourable environment for investors, both foreign and Brazilian. Although investment levels in the region are good, Dilma defended the need for these to increase and called for a rise in private investment.

“Our objective is to create a comfortable environment for current or new investments and to reinforce our commitment to long-term investments,” she said.

Obelisk International welcomes this firm government commitment to investment in north east Brazil. Obelisk has been present in the area for several years and is firmly convinced of the region’s potential. We believe that the government pledge to maintain investment sums is excellent news for both our current and future investors.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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Brazilian Real Estate Index On the Way

Although the Brazilian property market is relatively young, it is maturing fast. One of the latest developments is the forthcoming official price index.

Investment in Brazilian real estate has increased hugely over the last two years, a tendency expected to last at least for the next decade. Accompanying the massive property investment has been a rapid rise in the prices of property in Brazil.

Keen to increase transparency within the real estate market (and by extension, investment), Brazil's President Dilma Rousseff is promoting the imminent arrival of the Brazilian Property Price Index. The Index was first instigated by the Brazilian Central Bank and the Minister of Finance.

A Methodology for Brazilian Property

The Property Index will be used to compare prices for different types of property in Brazil, both residential and commercial, over periods of time. Experts believe the Index will allow the Brazilian property market to be monitored and help avoid potential bubbles and crashes in the future, suffered by so many other property investment destinations recently.

The Brazilian property situation is complex and varies widely from region to region. Although there's a countrywide shortage of real estate, Brazil's huge population and disparate income levels mean it's difficult for a methodology to compare like for like.

Government and Caixa experts have been analysing different property price indices around the world to find the best methodology for Brazil. Property indices used in Australia, New Zealand, Spain and the US are thought to be the ones that best reflect the reality of the Brazilian property market.

The First Stages

The first index of property prices in Brazil is currently being compiled by the Brazilian Statistical Institute (IBGE) and Caixa bank (the government-owned bank responsible for all financing of Minha Casa Minha Vida investments). Caixa has already mapped out prices in real estate sectors in the areas in Brazil where it provides mortgages.

The initial stages of the first index for real estate in Brazil will compare the values of properties in five capitals. Once the Index is up and running, it will feature the prices of houses and apartments across Brazil.

The Index's primary use will be for Brazilian real estate agents and investors as it will be a fair assessment of property values. Caixa also plans to use the Index as a means of determining values for mortgages in Brazil.

For Obelisk International, the imminent implantation of the Brazilian Real Estate Index is undoubtedly good news. The Index will provide a very useful tool for investment in Brazil as well as allowing greater transparency in the market. Obelisk also believes that the Index shows Brazil is moving towards maturity as a property investment destination.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Obelisk Announces Next Minha Casa Minha Vida Investment

On the back of its resounding success in investments in the Brazilian Minha Casa Minha Vida programme, Obelisk is pleased to announce its next social housing project.

Minha Casa Minha Vida 4 Phase II is the latest in Obelisk’s Brazilian investments. And like Obelisk’s other social housing projects, it offers exceptionally high returns over a short time frame.

With a minimum capital investment of €200,000, investors in this latest Brazilian real estate project will receive 170% returns in 24 months. This equates to 35% profit a year, one of the highest rates available for short-term investment. The 70% profit is returned to the investor as a dividend, which has the added advantage of being exempt from tax in Brazil.

The latest Minha Casa Minha Vida (MCMV) development is in a highly sought-after area in the up-and-coming city of Parnamirim. All licences – including approval from Caixa bank– are in place for the development and construction on MCMV 4 Phase II began in January this year.

Minha Casa Minha Vida is the Brazilian government’s flagship social housing programme. Designed to reduce the serious shortage of Brazilian Real Estate, MCMV is building 3 million homes by the end of 2014. In December 2010, the programme reached its target of 1 million properties and with government commitment and finance in place, the second stage of 2 million homes is already well underway.

The entire MCMV programme is financed by the government-owned bank, Caixa, one of the largest in Latin America and a giant in the Brazil mortgage market (Caixa has 76.21% of the home loans market). All MCMV developments must be approved by Caixa whose finance provides funds for development and mortgages.

Investment in Minha Casa Minha Vida with Obelisk International comes with full peace of mind. As well as the security of investment in a government-backed programme financed by a government-owned bank, investment in MCMV 4 Phase II is guaranteed through contract. Obelisk believes there are few other capital investments on the market offering security at so many levels.

Along with this peace of mind and 170% returns in just two years, investors in this particular sector of Brazilian real estate also have the satisfaction of knowing that their capital is helping Brazilian families fulfil a lifetime dream of owning their own home. And investments do not come better than that.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Over 9 Million Buyers for Brazilian Real Estate

9.1 million families plan to buy real estate in Brazil over the next 12 months. This is a huge increase since the Minha Casa Minha Vida (MCMV) programme was introduced in 2009.

A recent survey carried out by the Data Popular Institute has found that 9.1 million Brazilian families intend to buy a property in Brazil over the next year. This purchase would allow them to leave rental accommodation and become property owners.

The subsidies and benefits included in the social housing programme Minha Casa Minha Vida mean that buying instead of renting is an increasingly popular option. MCMV offers reduced mortgage interest rates to qualifying families so monthly mortgage payments are invariably cheaper than rent.

The number of potential buyers of Brazilian real estate has increased dramatically since Minha Casa Minha Vida first made its appearance in 2009. Less than two years ago, 4.2 million families had serious plans to buy property, a figure that is now more than twice as high. This massive hike is due to several factors such as the increase in salaries, wider availability of credit and better education, all part of the bigger picture of a booming Brazilian economy.

Middle Class Drives Property Investment

Brazil has one of the world’s fastest growing middle classes and this is the social sector where demand for a home is highest. Of the 9.1 million families, Data Popular found that the majority lie within the 3 to 10 times minimum salary income bracket. This sector, known as Class C, is the major engine behind consumer spending in Brazil with an ever bigger appetite for all kinds of consumer goods from health foods and flat-screen televisions to cars and real estate.

Brazilian families would, according to the survey, like to buy a house rather than an apartment and the Minha Casa Minha Vida scheme caters for both types of property. However, lack of available land means that houses form a smaller part of the programme than apartments, particularly in the large cities.

Another obstacle in the way of the 9.1 million dreams of new homes in Brazil is that the Brazil property market is still relatively small. And, although civil construction in Brazil is booming, this huge demand is unlikely to be fulfilled in the near future.

New Prices for Minha Casa Minha Vida Property

To help ease the pressure on supply in the MCMV programme, the Brazilian government has just raised the ceiling on social housing prices. The previous price limits meant that many middle class families were excluded, particularly those earning between 3 and 10 times the minimum salary.

The new ruling on maximum prices varies depending on the size of the municipality. For example, in Natal in north east Brazil, the top price for Minha Casa Minha Vida real estate is now R$150,000 (up from R$130,000). In the metropolitan area around Natal (Grande Natal), the most expensive Minha Casa Minha Vida properties now cost R$130,000 instead of R$100,000.

These price changes should lead to more flexibility within this sector of the Brazilian real estate market and more importantly, allow more choice. Last year, high demand for low-cost property in Brazil meant many aspiring homeowners were unable to buy where they wanted.

In terms of opportunities for investment in Brazil, Obelisk International sees the latest developments in the Minha Casa Minha Vida programme as an added advantage. The potential for investment is opened up still further. And with 9.1 million buyers, Obelisk believes this potential is likely to last for years to come.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Emerging Trends in Brazilian Real Estate 2011

The attraction of investment in Brazil is undeniable. When so many developed markets present limited opportunities for investment, Brazil is exactly the opposite.

“People want to be where the action is, and that’s Brazil,” comments the latest PricewaterhouseCoopers ‘Emerging Trends in Real Estate’. Brazil features strongly in the 2011 report, particularly in an American context. “Where the United States has gone boom-bust and Canada offers only modest growth, Latin America’s story centers on the enormous potential of two emerging markets – Brazil and Mexico,” says the report.

The PricewaterhouseCoopers (PWC) report claims that Brazilian investments are relatively unusual in a North American portfolio but for those who do make investment in emerging markets, “the action is all about two countries”, Mexico and Brazil.

Brazilian Real Estate Trends

Brazilian real estate presents some compelling opportunities, according to PWC. Demand is riding high on the back of the chronic shortage of property in Brazil and the growing purchasing power from Brazilian consumers. One investor in Brazil quoted in the report comments, “There’s a ton of demand for a ton of new space. You can build housing forever, and people will want it”.

One of the principal drivers behind the burgeoning demand for Brazilian real estate is the rapidly-expanding middle class. For PWC, “the middle class is huge and dramatically increasing, creating intense demand for highrise residential and retail”.

The PWC report points out that along with Brazilian apartments and houses, other opportunities for investment in property in Brazil lie in shopping malls and logistics. “Shopping centers are few and far between, and distribution warehouse facilities are in short supply to serve growing consumer appetites,” says ‘Emerging Trends in Real Estate 2011’.

Investment in Offices in Brazil

Offices are another buoyant market for investment in Brazilian real estate. PWC finds that the two cities of Rio de Janeiro and Sao Paulo dominate the market, almost excluding all other cities. As one investor quoted in the report says, “Everyone wants to be in Rio” where there’s virtually “zero percent vacancy” and rents increased by 30% last year. Office real estate in Sao Paulo presents a similar picture. According to PWC, “it’s a bubble driven by user demand, not speculators”.

The report cautions that opportunities for new development in offices in the two biggest cities are limited by poor infrastructure. The increase in population in Rio de Janeiro and Sao Paulo is putting serious strains on the cities’ roads and public transport networks. This may impact on opportunities for investment in Brazilian offices, although PWC interviewees expect this sector of real estate in Brazil to “remain enticing”.

Real Estate Drivers in Brazil

As well as demand for property, Brazil has other factors contributing to its appeal as a real estate investment destination. For PWC, these include self-sufficiency in agriculture and energy, and expansion in its high-tech manufacturing. In addition, PWC cites “the swirl of young populations, an energized middle class, and the immense promise of expanding industries” as some of the advantages offered by Brazilian investments.

PWC also points that local knowledge is a vital component of successful investment in Brazilian real estate. The report emphasises the need for local know-how – “Local companies with big development platforms and insider connections have a tremendous advantage”.

For Obelisk, ‘Emerging Trends in Real Estate 2011’ offers the essence of the possibilities for investment in Brazil. Our market research has also found “there’s a ton of demand” and that user demand is driving the Brazilian real estate market. Our presence in north east Brazil means we can call on local companies and insider connections to make sure we offer only the very best investment opportunities.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.

Brazil is Investment Hot Spot

Brazil investment potential recently led the Daily Mail Investment Extra to describe it as “a hot spot for those seeking big returns”. Brazil is currently the world’s eighth largest economy and one of the fastest growing. Thanks to massive sums of foreign and domestic investment, Brazil saw GDP growth in excess of 7% in 2010, the fastest expansion for the last 20 years.

Along with Brazil's strong economic growth goes a record increase in employment - Brazil created 2.52 new jobs in 2010 with 3 million expected this year.

Unemployment in Brazil in December 2010 stood at a record low. The 5.3% rate is the lowest since 2002 and is 15% lower than 2009. This figure is good news for the Brazilian economy as more employment translates into more consumer spending, which in turn spurs on investment opportunities in Latin America’s largest country.

Foreign direct investment in Brazil in 2010 is expected to total around US$3.5 billion, a figure that tops the 2008 record. This high level of investment in Brazil is one of the motors behind job creation and unsurprisingly, employment in Brazil is strongest in those sectors experiencing high investment.

Top of job creation is civil construction in Brazil where the number of jobs was 8.1% higher in 2010 than 2009. Many of these jobs are in the Brazilian real estate sector, particularly in the Minha Casa Minha Vida social housing programme. This massive government boost of 3 million homes to the Brazilian property market has opened the door to employment to many Brazilians as well as providing homes for thousands of families.

As demand for Brazilian commodities and products grows on both the international and domestic markets, investment opportunities in Brazilian industry and manufacturing are also big job creators. The extraction industries and utilities sector was the second largest generator of employment with 7.8% more jobs in these sectors in 2010.

Along with rising employment, Brazilians are earning more. The average salary in December last year was R$1,515.10, the highest ever and up 5.9% on December 2009. Higher purchasing power means Brazilians are bigger spenders as shown by record sales of household appliances, cars and property in Brazil last year.

This increase in consumption is one of the main attractions of Brazil as an investment destination. For the Daily Mail Investment Extra, Latin America’s “growing populations with burgeoning workforces are enhancing earning and spending power, and this in turn is driving domestic growth, urbanisation and industrialisation”.

Obelisk investments tap into the various booming sectors in Brazil – real estate, construction and social housing – which we believe provide the investment opportunities with the largest returns. For Obelisk, Brazil is undoubtedly the hottest spot in Latin America.

Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.