New Middle Class Boosts Brazilian Real Estate in Natal

The rise of the middle classes is a big demand driver behind the current boom in Brazilian property. Zona Norte in Natal, north east Brazil is an example of a new middle class district expanding because of this demand.

Natal, the capital of Rio Grande do Norte, is one of the fastest growing cities in north east Brazil. Within the city is the district of Zona Norte, a rapidly expanding suburb with huge opportunities for new businesses and Brazilian real estate investment.

Residential Demand Fuels Investment Opportunities

Zona Norte is home to around 37% of Natal’s population and the area has seen big migration over the last few years with over 300,000 Brazilians moving there. This migration in tandem with increasing purchasing power among the growing Brazilian middle classes has led to vast expansion of the suburb.

Essentially a residential area, Zona Norte is popular with Class C – the largest and fastest growing sector of Brazilian society – and Class D. This means the area meets criteria for investment in Brazil social housing projects under the Minha Casa Minha Vida government programme. Obelisk International is one of the social housing developers in Zona Norte and is currently involved in a large Minha Casa Minha Vida project near the Lagoa Azul area.

“Along with big residential development, Zona Norte has seen a massive increase in the number of businesses and shops setting up in the area since 2007,” says Gary Hardacre, CEO of Obelisk International. “The two impulses – residential and commercial – mean Zona Norte is turning into the up-and-coming area in Natal, part of our reason for choosing it as a focal point for one of our Brazil investments,” he adds.

Massive Commercial Demand

Norte Shopping, the first large shopping mall in the region, was built in 2007. The success of Norte Shopping has been such that the mall is still growing. Expansion is due to continue until 2013 with a multi-screen cinema opening this autumn.

Alongside Norte Shopping are hypermarkets and megastores selling household appliances. But not all businesses are large scale in Zona Norte – dozens of small companies and shops have set up in the area to make the most of the investment opportunities offered by Zona Norte’s expanding population.

The combination of a growing middle class with increasing purchasing power plus the employment opportunities offered in the area make Zona Norte an extremely attractive location to open a new business in north east Brazil. According to the local small and medium business organisation Sebrae/RN, Zona Norte currently has the highest number of new business applications.

For Obelisk International, the expansion of Zona Norte powered by the growing middle classes illustrates the strength of demand for investment in Brazilian real estate from the local population. “This demand is real and tangible,” says Mr Hardacre, “and because of this, we believe the Zona Norte area represents excellent potential for Brazilian property investment.”

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This is the Year for Brazilian Investment

Brazil’s Finance Minister is set on between 4% and 5% growth for his country this year. Combining lower interest rates with greater private investment in Brazil, Guido Mantega claims that this is the year for Brazilian investment.

In an interview published in the economic weekly Istoe Dinheiro, Mr Mantega sets out his economic plans for Brazil during 2012. While he does not reveal his exact plans on public spending cuts, Mr Mantega is clear on where the opportunities lie this year – private Brazil investments.

Consolidated Accounts

Brazil’s President Dilma Rousseff has reportedly ‘ordered’ at least a 4% increase in GDP growth for 2012. This bold goal in the current global economic climate is, according to Mr Mantega, very achievable for Brazil.

His first step is to keep the budget surplus to 3.1% of the country’s GDP to protect Brazil against external economic turmoil. “Brazil has had a budget surplus for 12 consecutive years,” he points out, “and this surplus consolidates our position.”

Mr Mantega is well aware that Brazil isn’t immune to global downturn, but he believes the country can protect itself and dictate its own GDP growth. With this in mind, another measure is to continue to bring Brazilian interest rates down. Cut to 10.5% in January, the Selic interest rate is forecast to see decreases to single digits over the next few months.

Promoting Investment in Brazil

Along with a solid budget surplus and lower interest rates, the Treasury aims to actively promote Brazilian investment. 2011 saw record levels of foreign investment in Brazil, but according to Mr Mantega, things are about to get even better.

“2012 will be the year of investment in Brazil,” he said. The Brazilian government is aiming to attract public and private investment funds to Brazil to modernise its infrastructure and reinforce its industrial sector. The government is targeting the areas of logistics, energy and housing.

Social housing investment is a top priority. To this end, the Finance Minister recently met with representatives from Caixa and Banco do Brasil banks, and Brazilian real estate developers to request acceleration in the Minha Casa Minha Vida (MCMV) programme.

MCMV – the largest investment in property in Brazil – aims to build 3 million homes by the end of 2014 and the Brazilian government is keen for this target to be met. “The Brazilian construction industry has been one of the fastest growing in recent years,” explains Mr Mantega, “but in the government we believe that we can work faster to deliver units.”

Obelisk International, a major developer of social housing under the MCMV programme in north east Brazil, welcomes this fresh impetus from the government to push Brazilian investment. “It’s good news for all foreign companies investing in Brazil,” comments Gary Hardacre, CEO of Obelisk International, “because this will help promote and facilitate private investment in the country over the next year.”

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Zell Continues to Bet on Brazilian Investments

One of the first foreigners to invest in Brazil, US billionaire Sam Zell maintains his bet on Brazilian investments. His latest acquisition includes the controlling stake of Tha Group, specialising in property in Brazil.

Through his investment company Equity International, Sam Zell has a history of interest in investments in Brazil and was one of the first foreigners to include Brazil on the global investment radar. Equity International’s Brazilian investments have to date included a range of companies operating within the Brazilian real estate market.

Expansion Within Brazil

One of the oldest companies in the Brazilian property sector, Tha Group specialises in development and construction of real estate. A spokesperson for the company said that the acquisition by Equity International will give Tha Group a much-welcomed opportunity to grow and expand within different regions of Brazil.

This expansion comes at a time when Brazilian real estate is experiencing strong growth, particularly in areas outside Sao Paulo and Rio de Janeiro. Real estate funds are increasingly interested in these areas and it appears Equity International is setting a trend for equity investment in Brazil.

Equity International has had stakes in shopping malls via BR Malls and commercial property in Brazil through Bracor. Sam Zell’s company has also owned interest in AGV Logistica and in 2011, formed part of Gafisa – one of the largest developers of real estate in Brazil – and Brazilian Finance.

High Performance from Real Estate Funds

The renewed interest from Equity International in property in Brazil comes as no surprise to market observers. Brazilian real estate funds achieved record highs during 2010 and last year also saw exceptional performance by some funds, although the average return of 11.63% was lower than 2010.

This average, however, hides a much higher performance from certain real estate funds in Brazilian. According to the business magazine Exame, the Banco do Brasil’s real estate fund achieved just under 58% for its holders last year. Other successful Brazilian real estate funds in 2011 belonged to Caixa, Brazilian Mortgages and Brazil Capital Real Estate Fund. All achieved returns in the region of 30% to 40%.

For Obelisk International, Sam Zell’s renewed interest in Brazil confirms the country as a top investment destination. “Mr Zell was something of a pioneer in Brazilian investments,” comments Gary Hardacre, CEO of Obelisk International, “and the fact that he’s back shows Brazil still has plenty of potential.” Obelisk International expects to see further big interest in Brazil from foreign investors this year.

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Foreign Investment in Brazilian Real Estate Higher Than Ever | Obelisk International News

While real estate investment in many countries flounders, foreign interest in Brazilian property has never been higher. 2011 saw record investment in Brazilian real estate and analysts expect more of the same this year.

According to the Brazilian investment agency ADIT Invest, financial transactions made by foreigners for real estate in Brazil rose by 50% in 2011. Top Rio de Janeiro property agents report that purchases by foreigners made up 30% of their business last year with the average property costing around R$2 million. Real estate professionals in Sao Paulo echo this and say that most foreigners are buying up property in Brazil for investment.

All the Right Criteria

Brazilian real estate is ticking more and more boxes for more and more foreign investors. At the top of the list sits a stable economy, particularly in today’s turbulent economic times. “The watchword for foreign investment in Brazil appears to be economic stability,” comments Gary Hardacre, CEO of Obelisk International, one of the main foreign companies investing in property in north east Brazil.

“Because Brazil has been virtually unaffected by the recent uncertainty and is presenting strong growth figures for 2012, more investors are turning to Brazil,” says Mr Hardacre. Predicted 4% GDP growth and record unemployment levels lead Obelisk International along with other foreign companies to expect to see more interest in Brazilian investment this year.

Big domestic drivers also form part of the attraction of investment in real estate in Brazil. These drivers include massive demand for housing from the ever-growing middle classes, whose greater purchasing power means thousands aspire to getting a foot on the property ladder. This demand is another major reason behind the current popularity of investment in Brazilian property.

Foreign Real Estate Companies Expanding

The tandem of strong domestic demand and increasing foreign interest has led many Brazilian real estate companies to expand their business in Brazil. Companies are increasingly providing websites in three languages – Portuguese, Spanish and English – to cater for new foreign investors and many agencies are opening offices outside Brazil.

And in turn, foreign companies dedicated to real estate in Brazil are strengthening their presence. According to Virginia Duailibe, President of the Brazilian Real Estate Association, “many large real estate multi-nationals such as CBRichard Ellis, Jones Lang LaSalle and Colliers International are expanding operations in Brazil”.

On the back of the big demand from the domestic market and foreign investors, analysts are convinced that 2012 will be another promising year for Brazilian real estate investment.

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The Luxury Touch to Brazilian Investment Opportunities

A booming economy has led to huge investment opportunities in Brazil across the social spectrum. Big money from consumer spending is entering both the lower end of the market and the higher luxury echelons of Brazilian society.

On the back of Brazil’s increasing population and wealth, record levels of foreign investment have entered Brazil this year. At the middle class end of the social scale are investments into consumer goods such as household appliances and cars as well as investment into the social housing programme, Minha Casa Minha Vida.

The fast-growing middle classes are widely considered to be one of the best investment opportunities currently on the Brazilian table. Foreign companies with a presence in Brazil such as Obelisk International, believe this potential is here to stay. But Brazil isn’t just about a booming middle class - Brazilian investment goes right across the board.

High Net Worth Brazilian Style

According to the 2011 World Wealth Report, Brazil ranks 11th on the global rich list. With 155,400 dollar millionaires, Brazil lies ahead of countries such as Mexico, Russia and Spain. The Report by Capgemini and Merrill Lynch Global Wealth Management finds that the high net worth population in Latin America generally is on the rise with a 6.2% increase in 2010.

When it comes to ultra high net worth, Latin America has the highest regional percentage (2.4%), with Brazilian millionaires making up a large part of this. Unsurprisingly, luxury goods are big business in Brazil, home to an increasing number of luxury brands. Sales in high-end consumer items are booming and expected to reach US$12 billion this year, a massive 33% increase on 2010.

Designer labels are more than aware of the huge investment opportunities presented by Brazil’s wealthy consumers. Sao Paulo acts as a magnet for luxury goods and latest additions include Diane von Furstenberg and Christian Louboutin, both with boutiques in the city.

New Opportunities

The massive millionaire market proves that Brazil is a honey pot for investment opportunities across the social classes. And wealth doesn’t just mean investment in designer handbags and haute couture suits; luxury Brazilian real estate also has a big and growing market as can be seen in the latest additions to city skylines.

Brazil, along with other emerging markets, has now consolidated its presence on the world investmen stage. “Emerging markets are not only sources of revenue, but sources of new ideas,” said Nizan Guanaes, a Brazilian advertising executive quoted in the Financial Times blog, Beyond Brics.

Mr Guanaes’ comment that emerging markets are “now players and the big guys, we are opportunities” sums up the huge investment promise found in nations such as Brazil, China and India. When it comes to choice and potential for investment, Brazil is hard to beat whatever your social target or preference.

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Commercial Real Estate in Brazil Ahead of the Game

Brazilian real estate continues to have the edge over most others in the world after a record third quarter in sales volume. Along with China, Brazil is the preferred destination for real estate investment opportunities.

A Q3 2011 survey into commercial real estate published by Real Capital Analytics finds that the total volume of sales in commercial property in Brazil reached US$35 billion. This is the highest quarterly level ever seen in Brazil, reflecting the big investor interest in Brazilian real estate.

Real Estate in Latin America Stays Hot

The survey reveals that sales in the Americas generally fell by 50% on this year’s second quarter. This marked decrease was prompted by the slowdown in the US mortgage market. However, on a continental level, Latin American real estate continues to boom with plenty of positive movement.

At the forefront of the property market in Latin America is Brazil, where commercial real estate – like residential property – is a hive of activity. “Hotels are of particular interest, especially in 2014 World Cup destination cities,” comments Gary Hardacre, CEO of Obelisk International, “and our market research is also noting large investments in office units in Rio de Janeiro and Sao Paulo.”

Real Capital Analytics found that Chile and Mexico were also favoured real estate investment spots in Latin America, although on a smaller scale than Brazil. Both represent stable economic markets, although Chile is less well-known for its property investment. The positive movements in Latin America commercial real estate confirm the region’s investment potential.

China and Brazil Investments

According to the survey, worldwide commercial real estate sales volumes reached US$568 during Q3, a year-on-year rise of 34%. 2011 is proving a particularly good year for commercial property investment since volumes have already surpassed levels in 2008 when the US real estate market crashed.

Globally, China and Brazil stand out as the top spots for investment in commercial real estate. Of the four BRIC nations, they are the only two now favoured massively by foreign investment in property. Interest in Indian commercial property has diminished dramatically and in Europe, Poland has overtaken Russia as a preferred location.

“Brazil is an obvious property investment target because of its size and market,” says Mr Hardacre. He also points out that Brazilian property investment is improving all the time – “Investors with Obelisk International have seen clear progress in market conditions over the last 12 months as the property market in Brazil comes to maturity.”

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Young Entrepreneurs Favour Brazil for Investment

Brazilian investment opportunities are not just top of the agenda for asset managers, hedge funds and developers of real estate. Young entrepreneurs also favour investment in Brazil, ranking the country third in the G20.

Among the G20 nations, Brazil comes in third place when it comes to attractive investment opportunities. In the latest Ernst & Young Entrepreneurship Barometer, young people in business rank Brazil behind the US and China but ahead of Germany, Japan and the UK in terms of a favourable business environment.

Optimism Plus Growth

Describing Brazilian investment as having “high potential and strong growth”, the Barometer finds young entrepreneurs very optimistic about opportunities in Brazil. This optimism springs from Brazil’s consolidated economic strength and “great policy improvements”.

Reflecting this, the creation of new businesses in Brazil grew nearly 30% between 2005 and 2008, considerably higher than the G20 average (11.8%). New business density in Brazil stands at 2.4, on a par with the 2.5 found in the G20 and much higher than the 1.3 average among the rapid-growth market.

Strengths & Opportunities

The Barometer lists the strengths in the Brazilian investment environment for young entrepreneurs. Highlights include a more favourable business culture towards entrepreneurship in Brazil, which is mirrored in high employment opportunities in small and medium enterprises, responsible for 80% of job creation.

Economic growth has expanded the consumer market in Brazil creating countless opportunities for investment in a wide range of business areas. The Barometer also notes that many sectors are fragmented, which translates into big potential for consolidation.

Infrastructure is another key area for Brazilian investments. Massive government and private investment for the 2014 and 2016 sporting events has, in turn, attracted huge interest. Brazilian real estate, particularly within the social housing programme Minha Casa Minha Vida is also a favoured destination for investors.

Tasks Ahead

Together with a huge potential for investment, Brazil comes with several challenges for newcomers and young entrepreneurs doing business there. The Barometer find high corporate tax rates and labour costs place obstacles in the way of new businesses. Starting a new business is also time-consuming and bureaucratic compared to some other G20 nations.

However, access to funding has improved and the government has pledged to reform tax regulations to facilitate doing business in Brazil. And in spite of the tasks ahead, Brazil is the best country in the G20 to do business for 58% of Brazilian entrepreneurs.

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Investors Descend on Brazilian Investment Opportunities

Brazil has become a magnet for foreign investors in search of investment opportunities. And the good news is that with its buoyant economy and booming consumer spending, Brazilian investments are here to stay.

In their latest report on Brazil, Ernst & Young take a look at Brazil’s economy, politics and demographics. Based on these factors, ‘Viewpoint, Brazil in Focus’ predicts that the current stellar growth is likely to continue at least until 2016, meaning potential for investment in the “global economic powerhouse” still has plenty of room for growth.

Finance Rushes to Brazil

According to Ernst & Young, asset managers are “rushing to take advantage of Brazil’s infrastructure investment”. Banks and hedge funds from locations globally “are descending on Brazil, all hoping to participate in the country’s long-overdue success”.

This dash to share a slice of Brazilian investment potential is reflected in record levels of foreign direct investment (FDI). In the 12 months to May this year, FDI in Brazil reached US$64 billion, the highest annual amount ever. FDI levels since May have continued to rise and financial experts are predicting 2011 will be the best year ever for Brazilian investment levels.

Economic Strength

A compelling reason for so much foreign interest in Brazil is its economy. With GDP growth of 6.9% last year, Brazil ascended to seventh place in the world economic power ranking. On the back of continued growth, many analysts believe Brazil will edge its way past the UK this year. And the government predicts that the Brazilian economy will see an average annual growth of 4.9% between now and 2015.

Part of this growth is fuelled by consumer spending, not least by the 20 million Brazilians who have joined the middle class since 2006. This trend has led to what Ernst & Young call “a remarkable consumer spending spree” and has affected goods across the spectrum from electronics and cars to property in Brazil.

The Growth Acceleration Plan (PAC) has had a major role in the new-found wealth. Under the PAC, millions have benefitted from better infrastructure, transportation and social improvements. The social housing programme, Minha Casa Minha Vida also forms part of the PAC and constitutes the largest investment in real estate in Brazil.

Challenges for Some Financial Sectors

Ernst & Young find that certain Brazilian investments face considerable challenges, particularly asset management and hedge funds. Obstacles include stringent regulations and the report notes that many foreign firms doing business in Brazil partner with established Brazilian companies.

Gary Hardacre, CEO of Obelisk International echoes this observation. “Brazil certainly represents a challenge for the outsider,” he comments, “and the best way to succeed in an investment in Brazil is to associate with a Brazilian company.”

Mr Hardacre also believes that it can pay to choose a Brazilian investment with less regulatory restrictions. “Brazilian real estate is a case in point,” he says, “with plenty of investment opportunities and high returns, but without the endless red tape especially if you invest with an established company.”

Ernst & Young report that, although asset management and hedge funds are very popular in Brazil, “investors are embracing exchange-traded funds and real estate funds”. Interest in Brazilian real estate funds is coming not just from foreign investment but also from Brazilian investors themselves, keen to get in on this sector within Brazil’s huge investment potential.

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Best Investment Opportunities in North East Brazil

North east Brazil is yet again tipped as a top Brazilian investment location. The region’s strong economy and population growth point to excellent opportunities in many areas, particularly real estate investment.

Brazil as a whole is enjoying buoyant economic growth and around 4% GDP is expected this year. But things in north east Brazil are even better with analysts predicting 5% growth in this part of the country. Hand-in-hand with this booming economy goes a growing population as the strong job market attracts Brazilians to the area.

Strong Drivers for Investment

North east Brazil therefore brings together several fundamentals for investment opportunities. Increased purchasing power from higher wages and better employment possibilities plus more people migrating to the area make for major demand drivers, particularly in Brazilian real estate.

The demand is so powerful that some experts in the Brazilian property market tip the north east as the best location for investments in real estate in Brazil outside the metropolitan areas of Sao Paulo and Rio de Janeiro. This is especially true for investors looking for medium-term investment in property.

Obelisk International fully recognises this potential with its Brazilian investments fully focused on this part of Brazil. Company market research has identified middle class C as a particularly promising market in the states in north east Brazil. Obelisk International is participating in the Minha Casa Minha Vida social housing programme with projects aimed at the lower and central tiers of Class C.

North East Brazil Equals High Returns

In a recent interview in the business weekly Exame, an expert in Brazilian real estate valuation, Marcos de Oliveira, Director of Consul Sheet said he is convinced that for property investment returns, Brazil has no area to match the north east. He bases this on the strong demand drivers in the area and the recent track record of property in Brazil’s north east.

“Ten years ago, land was fetching little more than R$1 per square metre,” said Mr Oliveira, “and asking prices are now more like R$300.” This 300% rise in land prices leads Mr Oliveira to believe the region has extremely promising prospects for investment opportunities over the medium term. Obelisk International shares this belief and fully expects prices to continue to rise over the next decade.

“For many investors, Brazilian investment opportunities are contained in Rio and Sao Paulo,” says Gary Hardacre, CEO of Obelisk International. “However, we believe that the best returns are elsewhere where the Brazilian real estate markets are more stable and less influenced by international investors. For Obelisk International, the best place to be when it comes to property in Brazil is the north east.”

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Brazil Investment Riding High

With its strong economy, booming investment opportunities and solid demand drivers, Brazil continues to ride high. Not only is confidence high at home, Brazil is making waves abroad too.

Unlike most political leaders at the moment, Dilma Rousseff is enjoying big approval. A recent CNI-Ibope survey found that a massive 71% of the Brazilian population approve of their President. 51% of those surveyed said they considered her government to be good or very good.

More Foreign Investment in Brazil

This positive climate at home is contagious and opportunities for investment in Brazil continue to attract foreign attention. Latest in the long list of Brazilian investment in 2011 is the Saudi Arabian airline, Emirates. Emirates has just received permission to operate an Airbus route between Dubai and Sao Paulo, adding to business opportunities between Latin America’s largest economy and the Middle East.

When it comes to technology, Brazil also offers plenty of investment opportunities. Foxconn, a manufacturer of touch screens for tablets, is reportedly close to closing a deal for a factory in Brazil. According to the financial weekly Istoe Dinheiro, the factory would be the first of its kind in the Western world and the deal will run to US$12 billion investment in Brazil.

Real Estate Investment Favourite

Foreigners are also busy buying up Brazilian real estate with Sao Paulo a particular hot spot among investors looking for luxury properties. Real estate agents quoted by the Brazilian Mortgage Association (ABECIP) report a 35% rise in investment in property in Sao Paulo by foreigners this year. Sotheby’s International Realty is expecting to quadruple its business among foreigners this year and predicts its sales of Brazilian property will total R$400 million.

Americans appear to have the biggest interest in Brazilian real estate at its top end – around 50% of Sao Paulo property buyers are from the US – with the average purchase price between R$1 million and R$3 million. Foreigners are attracted to two aspects of the Brazilian property market – its price (luxury property in Brazil comes with a much smaller price tag than in Europe) and the potential returns, currently around 12% a year.

Like other foreign companies with investment in Brazil, Obelisk International has observed the confidence in the Brazilian market, both from Brazilians themselves and from new foreign investors. “Brazil really stands out at the moment as the place to be,” says Gary Hardacre, CEO of Obelisk International, “and this year’s big investment in real estate confirms our belief in the market.”

However, Obelisk International market research shows that the Sao Paulo property market may be in danger of over-heating and Mr Hardacre believes investors should look beyond the affluent south west of Brazil. “Other less-known areas of Brazil such as the north and north west also have big opportunities for real estate investment,” he says, pointing out that returns are often considerably higher.

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3 Million Properties in Brazil Not Enough

3 million social housing units in the Brazilian real estate programme Minha Casa Minha Vida will not be enough. According to government figures, Brazil will need 23 million properties over the next 20 years just to meet demand among low-income families.

The Minha Casa Minha Vida project is currently into its second phase and 2 million affordable housing units will be built over the next three years. While these properties in Brazil will go some of the way towards closing the gap between supply and demand, the Ministry of Cities believes millions more will be needed between now and 2031.

Speaking on a recent radio programme, the Housing Secretary Ines Magalhaes explained that the current Minha Casa Minha Vida project will fall far short of fulfilling demand. Official government figures highlight a deficit of 23 million properties among families earning between zero and three times the minimum wage.

Minha Casa Minha Vida Moves Forward

This income group has an allocation of 1.6 million homes, which have been affected by changes in regulations under phase two of Minha Casa Minha Vida. For example, these social housing units are now larger, more expensive and must include solar panels and tiled floors.

Slow government bureaucracy means these changes have only just been finalised and as a result, Ms Magalhaes said that all contracts for housing units for the 0-3 income bracket throughout Brazil have been delayed. However, she reiterated that with the government budget already in place for this year, the Ministry of Cities expects the back-log to be quickly resolved.

Ms Magalhaes also explained more about the holistic nature of this huge investment in Brazilian real estate. As well as homes, Minha Casa Minha Vida is providing considerable opportunities for women. Not only are women becoming homeowners – women signed 94% of Minha Casa Minha Vida contracts signed this year – they are also benefitting from jobs in civil construction through the programme.

Promising Investment Prospects

The social advantages provided by social housing investment in Brazil look set to continue well into the future. Investors too can expect to benefit from this niche market. With a shortage of 23 million homes, the demand for real estate in Brazil from low-income families points to very promising prospects for social housing investment in Brazil over the next two decades.

Although it’s early days yet, Obelisk International believes that the Brazilian government will continue with a third phase of Minha Casa Minha Vida beyond 2014. “This would make sense given the huge success of the first two phases,” comments Gary Hardacre, CEO of Obelisk International, “particularly since the housing shortage in Brazil is so acute. It’s obvious 3 million homes are not enough and we believe investment opportunities in Minha Casa Minha Vida will be part of the Brazilian investment scenario for years to come.”

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Brazilian Investment Beats the Crisis

With most of Europe in financial and economic straits, Brazil beckons as the place for investment opportunities. The country is well set to weather the global crisis and may even benefit from it, a huge plus for Brazilian investments.

Based on Moody’s latest comments on the Brazilian economy, the Financial Times (FT) blog beyondbrics claims Brazil is the best place to beat the crisis. “Stressed out about the eurozone crisis? Worried about bank CDS spreads? Perhaps it’s time you moved to Brazil,” starts one of last week’s blog entries.

Good Economic Management

The FT comes to this conclusion based on remarks made by the regional credit officer for Moody’s in Latin America Mauro Leos, at a recent Sao Paulo conference. Mr Leos noted that Brazil is a good economic position in the face of the current crisis and pointed out that during the last global crisis in 2009, Brazil investment rating went up.

This rise in rating was awarded because of Brazil’s response to the crisis and “the resilience that was shown,” Mr Leos explained. Management of economics is a criteria Moody’s look at when reviewing ratings – “one of the things that allows us to understand a country and better differentiate them is how they behave during a crisis,” he said.

Brazil managed the previous crisis well with only a brief recession during Q4 2008 and Q1 2009. Since then, the country has gone from economic strength to strength. Buoyant GDP growth last year is continuing this year, unemployment is at a record low and Brazilian investment is experiencing a boom with the highest inflows ever.

Balanced Books

The FT emphasises other positive points in the Brazilian economy, particularly the solidity of banks in Brazil. Unlike many of their European counterparts, Brazilian banks have high capital reserves thanks to strict banking regulations. Brazil also has its external accounts in good order.

Moody’s, who raised Brazil’s rating last June to Baa2 with a positive outlook, are not troubled by the rising inflation rate in Brazil. Moody’s timescale for upgrades is usually between 12 and 18 months, and Mr Leos said the credit agency intends to review Brazil’s rating in autumn next year at the earliest.

Obelisk International shares Moody’s positive outlook for Brazil and firmly believes that with the financial uncertainty in Europe, Brazil is proving to offer the best – and safest – opportunities for investment. “There’s no doubt that Brazil is the place to be for investors,” says Gary Hardacre, CEO at Obelisk International, “as it has solid economic foundations and demand drivers that are difficult to match.” Record levels of investor confidence and foreign investment in Brazil would seem to prove that it certainly is time to move your investments to Brazil.

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Social Property Investment

Social media has fast become an essential part of doing business and LinkedIn, Twitter and Facebook are now ahead of some of the more traditional marketing tools. By following Obelisk International on the main social media sites, investors can keep up with our latest information on opportunities for investment in Brazil.

Link in to Investment Opportunities

LinkedIn, with over 120 million members, is an ideal networking platform for any investment business. Taking advantage of this, the Obelisk International network taps into the experience of real estate investment specialists located round the world.

Obelisk International is active in several LinkedIn groups discussing topics such as Brazilian investments, alternative investments and Latin American real estate. To follow Obelisk International on LinkedIn discussion groups, click here. Or connect with Obelisk International directly through your LinkedIn account and join our network.

Brazilian Investment Tweets

Keeping ‘tweeters’ up-to-date with what’s happening in Brazilian property, Obelisk International has a well-established Twitter presence. We tweet regularly on Brazil news, information related to investments in Brazil and our company. Minha Casa Minha Vida real estate investment also features in Obelisk International tweets. Click here to follow us on @ObeliskInvest.

@ObeliskInvest manages a series of lists with our followers divided into useful categories such as Brazilian real estate, finance information, Brazilian government sites and Brazil media. Choosing to follow one of our lists allows instant access to tweets from companies and individuals who are experts in your chosen category.

Obelisk International runs a specialist Twitter account for our Minha Casa Minha Vida investment site. Here, we tweet on the latest news and events related to the social housing programme and on the shortage of property in Brazil. Follow our Minha Casa Minha Vida project on @MinhaInvest.

Investment Opportunities to Like

Last but not least is Facebook where you can also keep up with Obelisk International. Get the latest on our investments and resources from the Welcome page. On our Wall, you can keep track of our weekly news on Brazilian real estate, Minha Casa Minha Vida and opportunities for investment in Brazil generally. Click here to like Obelisk International on Facebook.

And as well as social media, Obelisk International maintains a strong web presence with its sister sites www.obeliskinternational.com and www.minhacasaminhavidainvestment.com. Both are constantly updated to bring investors the very latest we offer in Brazilian investments. Whatever your preferred source of information – website, Twitter, LinkedIn or Facebook – we look forward to “meeting” you!

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Contact Obelisk International on 0034 952 820 319. Via email: info@obeliskinternational.com or visit our website: www.obeliskinternational.com.
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3 Million Properties in Brazil Not Enough

3 million social housing units in the Brazilian real estate programme Minha Casa Minha Vida will not be enough. According to government figures, Brazil will need 23 million properties over the next 20 years just to meet demand among low-income families.

The Minha Casa Minha Vida project is currently into its second phase and 2 million affordable housing units will be built over the next three years. While these properties in Brazil will go some of the way towards closing the gap between supply and demand, the Ministry of Cities believes millions more will be needed between now and 2031.

Speaking on a recent radio programme, the Housing Secretary Ines Magalhaes explained that the current Minha Casa Minha Vida project will fall far short of fulfilling demand. Official government figures highlight a deficit of 23 million properties among families earning between zero and three times the minimum wage.

Minha Casa Minha Vida Moves Forward

This income group has an allocation of 1.6 million homes, which have been affected by changes in regulations under phase two of Minha Casa Minha Vida. For example, these social housing units are now larger, more expensive and must include solar panels and tiled floors.

Slow government bureaucracy means these changes have only just been finalised and as a result, Ms Magalhaes said that all contracts for housing units for the 0-3 income bracket throughout Brazil have been delayed. However, she reiterated that with the government budget already in place for this year, the Ministry of Cities expects the back-log to be quickly resolved.

Ms Magalhaes also explained more about the holistic nature of this huge investment in Brazilian real estate. As well as homes, Minha Casa Minha Vida is providing considerable opportunities for women. Not only are women becoming homeowners – women signed 94% of Minha Casa Minha Vida contracts signed this year – they are also benefitting from jobs in civil construction through the programme.

Promising Investment Prospects

The social advantages provided by social housing investment in Brazil look set to continue well into the future. Investors too can expect to benefit from this niche market. With a shortage of 23 million homes, the demand for real estate in Brazil from low-income families points to very promising prospects for social housing investment in Brazil over the next two decades.

Although it’s early days yet, Obelisk International believes that the Brazilian government will continue with a third phase of Minha Casa Minha Vida beyond 2014. “This would make sense given the huge success of the first two phases,” comments Gary Hardacre, CEO of Obelisk International, “particularly since the housing shortage in Brazil is so acute. It’s obvious 3 million homes are not enough and we believe investment opportunities in Minha Casa Minha Vida will be part of the Brazilian investment scenario for years to come.”

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 Investment Beats the Crisis

With most of Europe in financial and economic straits, Brazil beckons as the place for investment opportunities. The country is well set to weather the global crisis and may even benefit from it, a huge plus for Brazilian investments.

Based on Moody’s latest comments on the Brazilian economy, the Financial Times (FT) blog beyondbrics claims Brazil is the best place to beat the crisis. “Stressed out about the eurozone crisis? Worried about bank CDS spreads? Perhaps it’s time you moved to Brazil,” starts one of last week’s blog entries.

Good Economic Management

The FT comes to this conclusion based on remarks made by the regional credit officer for Moody’s in Latin America Mauro Leos, at a recent Sao Paulo conference. Mr Leos noted that Brazil is a good economic position in the face of the current crisis and pointed out that during the last global crisis in 2009, Brazil investment rating went up.

This rise in rating was awarded because of Brazil’s response to the crisis and “the resilience that was shown,” Mr Leos explained. Management of economics is a criteria Moody’s look at when reviewing ratings – “one of the things that allows us to understand a country and better differentiate them is how they behave during a crisis,” he said.

Brazil managed the previous crisis well with only a brief recession during Q4 2008 and Q1 2009. Since then, the country has gone from economic strength to strength. Buoyant GDP growth last year is continuing this year, unemployment is at a record low and Brazilian investment is experiencing a boom with the highest inflows ever.

Balanced Books

The FT emphasises other positive points in the Brazilian economy, particularly the solidity of banks in Brazil. Unlike many of their European counterparts, Brazilian banks have high capital reserves thanks to strict banking regulations. Brazil also has its external accounts in good order.

Moody’s, who raised Brazil’s rating last June to Baa2 with a positive outlook, are not troubled by the rising inflation rate in Brazil. Moody’s timescale for upgrades is usually between 12 and 18 months, and Mr Leos said the credit agency intends to review Brazil’s rating in autumn next year at the earliest.

Obelisk International shares Moody’s positive outlook for Brazil and firmly believes that with the financial uncertainty in Europe, Brazil is proving to offer the best – and safest – opportunities for investment. “There’s no doubt that Brazil is the place to be for investors,” says Gary Hardacre, CEO at Obelisk International, “as it has solid economic foundations and demand drivers that are difficult to match.” Record levels of investor confidence and foreign investment in Brazil would seem to prove that it certainly is time to move your investments to Brazil.

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