4 good reasons to invest in real estate in Rio de Janeiro
6 December 2019
1) Low prices
Brazil experienced a period of strong growth between 2008 and 2014 with property prices skyrocketing. This long period of growth was violently interrupted by a recession just after the 2016 Olympic Games, which logically led to a drop in real estate prices. Banks have begun to tighten their lending criteria, cutting their financing in half.
Today, this slowdown is finally over, and optimism that economic growth will return has already increased demand for real estate. Currently, real estate prices are considered to be quite low, but experts are ensuring strong growth over the next few years. The Brazilian economic scenario suggests that the year 2020 represents an opportunity for buyers to obtain favourable business. In Rio, the most profitable investment districts are located in the South zone, with an average price of 3,500 euros/m2, well below properties of the same standard in Europe.
2) Funding rates that keep dropping
The decrease in financing rates practiced by banks has a profound impact on the purchasing power of the population and is expected to increase significantly in the coming years.
Indeed, financial institutions are optimistic about Brazilians' access to home ownership thanks to ever more advantageous rates, which will generate more demand. Indeed, banks are calling for attention to the future evolution of these rates.
If banks are increasingly facilitating access to property for Brazilians, the current context is therefore appropriate for real estate investment in Rio de Janeiro and Brazil in general. This is definitely the time to consider investing in order to make significant capital gains in the coming years.
3) The devaluation of REAL
Uncertainties favour the dollar and the euro against the real, Brazil's currency, which suffers from doubts about President Jair Bolsonaro's economic policy.
Brazil's currency crossed the R$4.25 per dollar threshold for the first time, a new historical record. The Brazilian currency has never been more favourable to international investors than it is today. The fact that the Brazilian economy is undergoing painful adjustments has also led to a substantial increase in the number of real estate properties. All factors combined, this is certainly a very favourable market for buyers, which is why a record number of foreigners are investing in real estate in Brazil at very attractive prices. A recovery in the economy will generate significant capital gains, which makes this period a very opportune time to consider.
4) Facilitating procedures
Recent efforts have been made by the Brazilian government to facilitate access to property, both for Brazilians and foreigners.
Since investment in the tourism sector is a government priority, a visa policy has been put in place to facilitate the settlement of many foreigners. Among other things, access to permanent residence for seniors or anyone investing in property in the country under certain conditions.
In addition, since 16 June 2019, the visa requirement has been lifted for US citizens who can now travel to Brazil freely for tourism and business. As for European citizens, they are granted a visa-free residence permit for up to 90 days per semester, which significantly facilitates their mobility.
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