Brazil is a vast resource-rich emerging nation. Since Lula da Silva became president in 2003, the country has made unprecedented social and economic strides. Not only was Brazil little affected by the subprime crises that almost sank the west’s financial system, poverty has been reduced dramatically. Moreover, economic growth is forecast to reach 7.1% this year.
Of the four BRIC nations (Brazil, Russia, India and China) identified by Goldman Sachs in 2001 to become global economic powerhouses, Brazil exceeded all expectations last year to be ranked top for sustainable economic growth in the GS Sustainable Economic Score index.
Massive government investment has been allocated to infrastructure improvements including the north east where, for example, a colossal new airport purported to be South America’s largest is under construction in the state of Rio Grande do Norte near Natal.
Brazil’s north east has always been a popular domestic tourist destination. Though less known for international tourism, the area is increasing in popularity and set to grow further for a number of reasons, not least of which is that Brazil will host the 2014 World Cup and the 2016 Olympics. These events will inevitably boost international tourism and energise Brazil’s fledgling international property market.
Foreigners have bought property across the nine states of the north east, but some of the strongest interest at present is found in the three states of Rio Grande do Norte, Pariaba and Ceará, especially along the Atlantic coast – hurricane and earthquake free with unending palm-fringed crystalline beaches and 300+ days of sunshine a year.
The state of Rio Grande do Norte, after Antarctica, has one of the cleanest atmospheres on earth. Its capital Natal, named as a host city for the World Cup and with a population of around 200,000, is known as one of Brazil’s safest cities. At the foot of Natal’s spectacular Ponta Negra bluff is a charming cluster of shops, bars and restaurants overlooking an expansive beach. In the northerly environs of the city is an exclusive new spa development, Natal Ocean Club Spa Residence.
A 90km drive south is the picture postcard town of Pipa with its heavenly beaches. Further down the coast in the state of Paraiba near its 700,000 strong capital city of Joâo Pessoa, is the 150-hectare eco-friendly resort development of Tambaba, adjacent to a protected rainforest.
The bustling Ceará coastal capital Fortaleza with a skyline of high rise buildings has a population of over 2m and 3km of sparkling urban beaches. A popular domestic tourist destination, the city’s urbanisation has been fuelled by an influx of Brazilians re-locating from the major cities of the south. That Fortaleza will be a 2014 World Cup host city and is a six hour flight from Lisbon makes it particularly attractive for property investment.
North east Brazil properties are relatively affordable compared, say, to their Caribbean counterparts. Capital appreciation is set to strengthen. But with any emerging market, painstaking research along with good independent financial, tax and legal advice is paramount. That some past European developments have stalled or failed completely is in part the result of over ambition and lack of due diligence.
Lula’s departure from office at the end of the year is not expected to have a major impact on the country. The two top contenders for president are José Serra, governor of Sao Paolo State and Dilma Rousseff, the government’s chief minister. Although Lula has endorsed the latter, reassuringly many observers expect continuity next January no matter who takes office.