Can brazil build on world cup success?
Arena das Dunas, Natal Photo: Populous
Ask any sporting fan and they will say that this has been one of the best World Cups in recent memory, with rollercoaster results and surprise upsets every step of the way. One country whose ups appear immune to the downs, though, is hosts Brazil, who go into the final week of the tournament as a broad favourite to win.
In some ways, the property market has already enjoyed a victory. In May 2014, enquiries for Brazilian property on TheMoveChannel surged 85 per cent year-on-year, while the #TMCWorldCup housing market head-to-heads have seen Brazil unbeatable so far.
Even when other teams are playing, Brazil is enjoying the global spotlight. 21.6 million American viewers watched USA play Belgium last week, notes Forbes, with the cup breaking all records for televised soccer matches.
As a result, US investors who have made the trip to support their team in Natal have started to look for a way to stay their more permanently.
“We knew nothing about Natal before we came here,” Jim Loseley from Miami tells Forbes, in between house-hunting for a holiday home.
Indeed, Natal already attracts a wealth of tourists every year (1.8 million) thanks to its spotless beaches and near-constant sunshine. Improved infrastructure across the country has also helped to strengthen the property market, positioning Brazil in good stead to build upon its sporting legacy.
Samantha Gore, Sales Manager for Brazil-specialist estate agent uv10.com, says: “By and large the World Cup has run very smoothly and, despite some protests against overspending, the new transport and infrastructure will serve well beyond the event."
"However," she continues, "what Brazilian citizens will want to see more of going forward, is investment in housing, education and public health.”
Indeed, Brazil's presidential campaign is now heating up with the ruling Workers' Party officially endorsing Dilma Rousseff to run for re-election. She promises to continue with social policies that have already lifted millions out of poverty.
During its tenure, the Workers' Party has presided over 12 years of prosperity – albeit with real economic growth slowing from 6.1% in 2007 to a forecast 1.5% in 2014. Unemployment is at a record low, while millions have received state benefits such as the Minha Casa Minha Vida subsidised housing project.
“Minha Casa Minha Vida was launched five years ago to get Brazil's poorest out of slum conditions and into decent housing," explains Samantha. "The housing shortage has been reduced significantly and certainly the World Cup will provide some assistance going forward with income generated from the worlds' most popular sporting event reinvested into public expenditure for Brazil's most needy.”
Demand for Minha Casa Minha Vida homes is still very high with approved families on long waiting lists. Progress is slow-going as home-grown developer finance is prohibitively costly and typically bureaucratic. An award-winning UK-based developer, though, is already on its seventh social housing project in Brazil: Monte Alegre in the city of Porto Alegre.
The initial phase of Monte Alegre comprises 500 two-storey two-bedroom houses and is priced at 21,000 GBP (currency fixed) per property with those buying between one and ten units enjoying a fixed return of 15% over a 12 month period.
"Private overseas investors are able to participate in Minha Casa Minha Vida with a very clear exit strategy," adds Samantha. "The full investment amount plus returns are delivered in just 12 months. Furthermore, all investment is done through a UK escrow account and subject to UK law to provide maximum security."
Minha Casa Minha Vida has been a significant driver of demand on TheMoveChannel.com in the past year. Indeed, Brazil now regularly appears in the portal's top five most popular countries each month. Earlier this year, Brazil was crowned winner of of the Buy-to-Let Property World Cup by Colordarcy Investment, with an average rental return of 6.33 per cent in January 2013 and a property price hike of 11.9 per cent between 2013 and 2014, which topped all other contenders in the agency's report.
"Brazil has been the most attractive market for property investors seeking the highest possible growth on their investment," says Colordarcy.
There may be a week of football still to come, but Brazil's property market is looking odds-on to come out on top.