Global events always spark currency movements and the latest in eastern Europe have sent currencies on the move again. And according to a recent article in Forbes, these movements are “creating windows of buying opportunities for dollar-holders in key property markets”. Forbes calls four of these windows “top safe-haven hard asset markets”, and Brazil is one of them.
Safe-haven currency opportunities
Currency plays a significant role in property investment, with fluctuations in exchange rates adding or removing value, sometimes overnight. But, as the Forbes article points out, “even a small shift” can make a big price difference, particularly for buyers in dollars.
Given the current global situation with conflict in Ukraine and uncertainty on the world’s oil markets, investments are looking for safe havens. And those that offer currency advantages are even more welcome.
Safe haven in Brazil
Forbes picks four locations in the world for its list of safe havens and Brazil is one of them. The article lists several reasons why the country makes its top choice at the moment.
Dollar advantage
According to Forbes, the dollar is currently 91% stronger than the Brazilian real than it was seven years ago. This shift translates to a massive increase in purchasing power for investors buying in Brazil in dollars.
The dollar’s run on the Brazilian real could be coming to an end since recent events have sparked an uptick in the real’s value. As a result, the dollar has lost 8% of its buying power so far this year, but despite the rise in the real, dollars are still king in Brazilian property investment.
Oil advantage
Brazil ranks as the world’s seventh-largest oil producer and is set to become the fourth largest in the next decade. Moreover, it’s almost self-sufficient and therefore much less vulnerable to the sharply increasing oil prices in the US and Europe.
Commodity advantage
Another reason making Brazil a safe haven for global property investors lies in its rich natural resources. The country is a major player in the world’s commodity markets and, as a result, is at less risk from the current disruptions to supply chains.
Foodstuffs advantage
Brazil is also one of the world’s largest producers of foodstuffs such as coffee, grain and oranges and in addition, is largely self-sufficient. This self-reliance also gives Brazil a competitive advantage in the world.
Safe haven for global property investors
Brazil also presents several compelling real estate advantages, apart from currency and strategic advantages. They include:
Higher purchasing power
Regardless of the recent rise in the real, Brazilian real estate continues to represent “a bargain at today’s exchange rates,” says Forbes.
Exchange controls
Investors must declare money flowing in or out of Brazil because of exchange controls. However, Forbes points out that transferring money is a straightforward process.
Fortaleza top option
Forbes picks Fortaleza, the capital of Ceará in Northeast Brazil, as its prime option for global property investors. The city is a firm favourite with the broadsheet. Earlier this year, it highlighted Fortaleza as one of the world’s top destinations for property investment. “appealing property options at bona-fide bargain prices”.
Selection of guaranteed returns
Forbes underlines Fortaleza as the choice for “a cash-flowing investment” because of the buy-to-let potential. In some instances, the cash flow comes guaranteed, as is the case at The Coral. For example, the 5-star resort offers investors two options with guaranteed rental returns of 6% or 7% for two to three years.
(Source: Forbes)
