Resicom – Holiday Investment – 04-21 – LB

Brazil’s High-end Property Offers Solid Investment

Despite the fact that the Brazilian property market is noting a slump, it has been revealed that high-end properties can still offer a solid investment for those buying long-term. By investing in the right neighbourhoods, foreign buyers can gain property portfolios that should ride out the downturn and return positive gains in the future.


In the capital of Rio de Janeiro, there have been reasons for distress, with property prices dropping by 7.44% since January. While residential values once soared above those of New York City, low oil prices and a global recession have sent prices spiralling downwards. This, combined with a corruption scandal at the heart of the nation’s semi-public oil company, Petrobras, has stopped development at a time when Brazil should have been seeing gains thanks to 2016’s Olympic Games.

Despite the doom and gloom, there is optimism for one specific sector: the high-end market. With numerous new developments and a glut of homes, there is an opportunity for buyers to take advantage of market conditions, particularly if they are keen to play the long game. Rob Speyer, Tishman Speyer Properties’ co-chief executive, said: ‘The country has some core strength that hasn’t changed despite the current challenges’. This means high-end homes near the beach could still be a very solid investment.

For savvy investors, the traditionally high-priced neighbourhoods of Rio remain a safe bet. Marina Mendonca, a consultant at Bossa Nova Sotheby’s International Real Estate, explained that the city’s pricey areas are the best places to look. Beachfront areas such as Ipanema, and the more secluded Leblon, continue to attract high prices and will maintain their value even if the housing bubble bursts completely. As an alternative, Lagoa – with its views of the mountains and the beautiful Rodrigo de Freitas Lagoon – is still popular, while there is also strong interest in Gavea, a neighbourhood known for its creative people and artists. For investors wanting gated communities with amenities and wide-open spaces, famous Barra da Tijuca and Copacabana remain attractive prospects.

In addition to traditionally luxurious areas, a number of new developments could also spark interest amongst buyers. As the nation prepares for the Olympic Games, a number of up-and-coming neighbourhoods have been busily developing new property. The athletic village of Ilha Pura, for example, includes 31 high-rise towers. Developers are having a hard time selling the homes, offering investors a bargain albeit at increased risk; meanwhile, Casa Atlantic is a high-end apartment block to be built in Copacabana and could be of interest to many.

Ms Mendonca advised that foreign investors with an eye on long-term investments should concentrate on the southern part of the city. Barra da Tijuca also offers some value if purchasers want more space. While there are a few restrictions pertaining to tide lands, rural land and areas bordering train tracks, there are currently no limits on property purchases by foreign buyers, making the market ideal for those overseas.

Amidst Brazil’s current property crisis, there could be some great opportunities for investors to see lucrative returns in the future.

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