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Boom for Holiday Property in Brazil

Along with real estate, holiday property in Brazil is fast growing in popularity. Not just with foreign investors but also with Brazilians buyers who are snapping up holiday property options in their home country.

According to RCI's Executive Summary from the ‘Latin American and Caribbean Vacation Ownership Fact Book', the ownership of vacation property in Brazil recorded double-digit growth last year. The weeks sold in Brazil in 2009 ran to over 14,300, reflecting strong interest in Brazil as a holiday destination.

Latin America is an area of rapid growth for timeshare - over 60 new resorts joined the RCI exchange system last year. These were mainly centred in Argentina, Uruguay, Colombia and Brazil where several luxury resorts entered the holiday property market. Brazil is currently developing resorts that combine high-end accommodation and amenities with ecological tourism.

Investment in Brazil resorts comes mainly from Europe where there is huge interest in the Brazil's potential. "The involvement of European investors is very important in the Latin American market," said Mario Ocampo, Director of public relations for RCI Latin America, "and part of the Brazilian growth in particular is due to European investment".

The purchase of holiday property abroad has traditionally been the domain of North America and Europe with the biggest advocates coming from the UK, US and Germany. However, the idea of buying into a holiday property is fast catching on in other countries. According to RCI, the vast majority of holiday weeks (97%) in Brazil were bought by Brazilians themselves.

At Obelisk, we believe that this tendency is a clear indication of Brazil's growing affluence. Once a mainly poor country, Brazil is now successfully dealing with its social inequality. Figures released by Cetelem Brasil, an affiliate of BNP Paribas, show that the Brazilian middle class (social group C) almost doubled between 2005 and 2009. Brazil's middle class now numbers 92.8 million people, compared with 62.7 million in 2005.

Less spectacular but still highly significant is the growth of social group A/B, the upper middle class. This increased by 14% to 30.2 million people over the same period. Cetelem also found that group C average earnings reached record levels last year.

Brazil's growing middle classes are an economic force to be reckoned with. Their ever-growing purchasing power means material goods such as cars, DVDs and mobile phones are selling like hot cakes in Brazil. Higher up the spending scale are holidays and leisure activities - Cetelem reports that expenditure on these rose by 10% in north east Brazil. It's therefore unsurprising that the purchase of shares in holiday property has taken off in Brazil.

Property is also on the aspiration list for Brazil's middle classes. Many families are buying their own home or refurbishing their current one, a process that is fuelling the booming real estate industry in Brazil alongside the government social housing scheme, Minha Casa Minha Vida.

For the growing upper middle class in Brazil, an investment property or holiday home is high on their wish list. This provides an exit strategy with strong potential for the foreigner investing in Brazil luxury property.

For Obelisk, it's clear that whatever your chosen exit strategy for investment, Brazil has the domestic market to support it. Whether you choose to invest in low-cost housing or a luxury beachfront villa, Brazil's potential to provide you with excellent returns is second to none.

 

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