Resicom – Holiday Investment – 04-21 – LB

World Cup Fever

The 2014 World Cup has bought publicity to Brazil, both good and bad. However, tales of crime have been overturned by the huge economic impact the cup is likely to have on the country, improving opportunities in both developed and poorer areas. A study by the Brazilian Tourism Institute told that around 3.7 million tourists will visit various cities in Brazil throughout the duration of the World Cup.

However, not everything in Brazil is football orientated. Boasting seven UNESCO World Heritage Sites, along with the Amazonian River and Rainforest, as well as miles of unspoilt beaches, Brazil was a prime tourist destination years before the new stadiums were built. However, the cup, along with the coming 2016 Olympics have sent prices soaring in property hotspot Rio, leading to rumors of a housing bubble. Prices in the city have risen over 250 per cent in the past six years, and rises of 200 per cent were reported in nearby Sao Paulo.

Julia Guzman, owner of luxury property company Rio Exclusive, told the BBC of healthy profits in recent years, and interest from both local and foreign investors which sees little sign of waning as more businesses relocate to Brazil. She said: ‘Everyone keeps talking about a bubble but people will keep buying in Brazil even if the prices are high. People see this as an opportunity to get a good return on their investment.’

The football tournament has not only brought new investment to towns and cities. In contrast to Rio’s attractions, such as the Christo Redentor, are its favelas, located just nearby.

With the price of rooms in Rio increasing by 600 per cent and hitting an average of £289 a night, the favelas offer an affordable alternative. Many are renting their properties through non-profit organisation Football Beyond Borders, a scheme which has seen small groups of families set up ‘accomodation hubs’ for fans staying during the World Cup.
Despite some safety concerns, crime rates are in fact a lot higher in Salvador’s more tourist orientated areas, and the community nature of the favelas mean that tourists see a completely different side to Brazil, and can also offer long term security to the community.!

Paul Kell, who has been working in Salvador for Football Beyond Borders since January, said: ‘We hope that our accommodation project will challenge the prejudice that still exists around favelas and their residents. The neighbourhood is an amazingly warm, vibrant place with an incredibly strong sense of community. It’s far from the stereotype of violence, danger and drugs which is often shown around the world, and we look forward to people visiting and realising this.’

Mary Santos da Silva is just one of those living in favelas and renting out their properties to strangers who come to enjoy the World Cup. She said: ‘This business helps me in two ways. It is great to make some money for my family, and it will mean I can build an extra floor where my daughter can live. But secondly, both my daughters are learning English. They love the opportunity to practice speaking and broaden their horizons through this cultural exchange.’

Despite the controversy surrounding it, it’s clear that the World Cup will have a lasting legacy on Brazillian property, whether by creating a luxury housing bubble in the ever popular Rio, boosting the country’s profile and encouraging tourism or merely allowing favela dwellers to use the money raised from renting out their property to expand their homes. The spectrum of impact is far reaching, and with the 2016 Olympics approaching, the impacts on investment are set to be huge.

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