Brazil has something to offer all tastes, from the exuberance of the Amazon jungle, the deserted beaches of the north-eastern coast, the cultural melting pot that is Salvador, the beautiful city Rio de Janeiro and Sao Paulo, South America's economic power house

Brazil has for many years suffered under extremely high interest rates, poor building practices and weak company structures. But now the market is changing dramatically; interest rates have fallen from their highs of 26 percent in 2003 to 13.75 percent presently, and the expectation amongst many economists is that they will continue to fall. Brazilian builders have now started to build to internationally recognised quality standards and it is not unusual to find a developer whose work is ISO 9001 accredited. After the debacle of the Encol scandal, when the largest builder in Brazil went bust due to financial mismanagement, the Brazilian authorities have tightened the regulatory framework too afford investors greater security, and not allow unscrupulous accounting to erode a development.

Lower interest rates have also given Brazilian banks the opportunity to offer mortgage products which in the past were just unthinkable; now it’s possible to get a 10+ year loan (despite interest rates over 15 percent) as once the purchaser has paid their deposit, buying via a mortgage is still cheaper than renting.

Brazil Realty Consulting (BRC) is an estate agency consultancy focused on the Brazilian market and operating in two main segments of the market: Commercial and Luxury.

Typical commercial investments could be:

• Buying a branch of a bank and leasing it back with a typical rental yield of 9.5-12 percent

• Buying a beach front plot with the idea of land-banking or developing a resort (returns have been in the region of 35-50 percent over the last 12-18 months).

• Building supermarkets and then leasing to a chain with a fixed rent plus a share of the turnover – realising a return of 14 percent for investors.

• Negotiating a good discount on an off-plan block purchase of a new residential development. Returns have been in the order of 70 percent or higher over the course of the building process and if one then rents out the property, the yield can be in region of 17-19 percent as opposed to 7-8 percent when based on the new value of the unit.

The luxury homes and apartments market is one of the fastest-growing sectors in Brazil – one of our well-travelled clients recently said that “nobody builds a penthouse like the Brazilians”. We have a selection of properties on our site, although these are only a small sample of the many available and also, many of the best are not ‘officially’ for sale. With our local network of partners we can deliver the property to meet your needs, be it your own island of the coast of Paraty, to a 4000ft2 apartment overlooking the Bay of All Saints, in Salvador, or a private beach house with a large stretch of beach to wander along.

The profile of UK property owners in Brazil is probably divided into two types of clients: those wishing to buy a second, or in some cases a third home in the sun; and investors who have researched the potential in the growing middle class market.

The most popular area for investing in homes in the sun is in the northeast with its all year tropical climates and relatively cheap cost of living, the furthest south that these buyers tend to look is the state of Bahia. Recent property hot spots include Fortaleza, Natal, and Salvador.

There are roughly 200 developments being built along the northeast coast, varying in size and quality, from a eight house small condominium with prices starting at £100,000, to large developments with a large amount of units, golf courses, hotels, and full leisure and home services, such as concierge, maids, cooks, car hire, property maintenance all aimed at making the buyers’ life easier, and the investment easier to rent. We have also seen the first few shoots of the really upmarket small developments; the first few have sprung up in Itacare in the south of Bahia, the prices for these types of developments start around £900,000.

The buyers looking to make a profit from the growth of the middle class property boom have tended to focus in four main areas Sao Paulo, Rio de Janeiro, Belo Horizonte and Brasilia. We have always recommended that investors buy from established quality Brazilian developers, many of which are now adopting world standards of quality and construction.

Currently mortgages make up about three percent of GDP in Brazil; there are a host of measures coming into effect in January 2007 to help stimulate the market. Compared with Mexico (11 percent of GDP) and Chile (17 percent), it’s easy to see why savvy investors are beginning to look at Brazil.

There are a series of other factors which make Brazil a good option for the future; it is fully self-sufficient in terms of its energy, it is the only major economy with a well defined and extensive renewable energy program. Brazil has a third of the world’s fresh water, it also has some of the best arable farm land. These are all issues which many economists think will be critically important in the next 20 years.

Clearly, the opportunities available in the Brazilian market are considerable. However, good representation is critical − especially in a market with language barriers, a complicated legal infrastructure, and different cultural mores. BRC is run by Anglo Brazilians − we understand the market and our partners treat us as Brazilian so we often get the first call when a new opportunity/home comes to the market. With our representation, you will be negotiating on a level playing field which is often not the case for foreigners operating in Brazil.