Buying real estate in foreign currency often offers the benefit of tapping into favourable exchange rates. Dollar buyers have enjoyed a particularly strong advantage since 2013 as the greenback has grown stronger. This edge dropped slightly in 2020, but according to Forbes, three markets continue to offer extra buying power this year. And the ‘super champ’ is Brazilian real estate.
Even more buying power in 2021
Forbes says that this year presents “a window of opportunity” to invest in dollars in Brazil, Mexico and Colombia. All three also offer interesting real estate investments plus attractive lifestyles for those thinking of living abroad.
Dollar buyers in any of the three Latin American countries can get considerably more for their money, particularly in Brazil. However, the article points out that 2021 is the year to buy to ensure maximum advantage from the strong dollar.
Brazilian real estate best of all
Of the three, Forbes describes Brazil as “the overall champ for currency discounts”. According to the broadsheet’s calculations, purchasing power for Brazilian real estate is up 32% this year. This is 101% more since 2015.
The latest Global Property Survey from Live & Invest Overseas also highlighted the extra value for money for dollar buyers in Brazil. The survey ranked Fortaleza and Ceará beachfront property as one of the five best investments in the world partly because of the currency exchange opportunity.
Historic high for dollar buyers in Brazil
The currency discounts giving dollar investors the chance to buy property up to a third cheaper this year represent a historic high. For Forbes, the favourable exchange rate means that 2021 is “perhaps the best time in our lifetime to buy”.
Because of currency controls in Brazil, transferring dollars involves declarations on your behalf. However, these are generally straightforward and involve simple paperwork, usually carried out by real estate agents in Brazil.
Take advantage of economic recovery
As well as taking advantage of the strong dollar, investors in Brazil also stand to benefit from the recovery of the Brazilian economy. Herein lies a two-fold benefit:
· A strong economy will lead to a higher increase in real terms of property prices, which in turns boosts potential for capital appreciation on Brazilian real estate.
· Economic recovery will also bolster up the Brazilian currency, raising the value of real estate investment in dollar terms.
Brazil has the edge
Forbes also highlights the dollar advantage in the real estate markets in Mexico and Colombia. Mexico is a particular favourite with American expats although owning coastal real estate involves setting up a property trust. Colombia offers the “best lifestyle buy” particularly in Medellín.
However, Brazilian real estate ranks as the overall best for dollar buyers in 2021. Mexican and Colombian real estate both offer a 7% increase in buying power this year while property in Brazil has the potential for 32%. This more than quadruples the Brazilian advantage making it the world “super champ” for foreign investors.