Brazil Tempts Overseas Buyers with New Government Moves

Dollar and Euro Currency

With one of the best performing domestic property markets in the world during 2012, the strength of Brazil’s residential and commercial sectors has been drawing in buyers from across the globe.

Now, new moves from the government aim to keep the momentum going with an offer of exemption from financial transaction charges for foreign investors.

The deal involves property investment trusts which are traded on the country's stock exchange, and is expected to give the market a further boost by increasing the number of high end properties being made available.

At present, an average local Real Estate Investment Trust yield hovers around 7% and the new announcement is expected to help local builders by giving them an alternative funding route.

Dyogo de Oliveira of the Finance Ministry explained: "The objective here is to stimulate long term investment in the real estate sector. This measure should not have a relevant impact on the currency."

Currently, the construction industry is heavily reliant on hard to come by loans from the state development bank BNDES. By opening up the market and incentivising overseas investors to put up capital, it is hoped that the amount of new supply will more than keep up with increasing demand.

House prices in Sao Paulo increased by 18.8% in the twelve months up to July 2012 according to The Global Property Guide, and Rio de Janeiro performed even better as property prices rocketed by 19.8%.

The strength of the housing market has been on the rise since 2008 and since then average house prices in Sao Paulo have increased by 144.1% and by 178.4% in Rio de Janeiro.

The level of activity has also been increasing, with a rise of more than 2% during the first six months of 2012.

Anyone considering transferring money to Brazil should use a specialist currency dealer, as exchange rates quoted by banks are almost always worse. Comparing the market is the best method of finding the cheapest way to send money abroad.

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