BRASIL, limits the purchase of Brazilian land to foreign investors.

11 August, 2011 No Comments

Last summer, the Brazilian Government put a limit on the purchase of land foreigners can buy, in order to avoid price speculation as well as the illegal production of biofuels. The government allowed the purchase of a maximum of 100 hectares with the condition that it must be registered.

Biofuels originate from the derivation of biomass, especially created for this purpose, becoming a renewable resource, as a counterpart to fossil fuels. Biofuels have been created to replace traditional fuels, which are harmful to the environment, with the advantages of being biodegradable, environmentally friendly and renewable.

Brazil has discovered that its engine to growth and development is based on executing large infrastructures, investments and technological innovations, which turns it into a great time for promotion and investment.

The real estate sector in Brazil also has its challenges and difficulties such as: the current inflation in land prices, the rising construction costs, and the bureaucratic difficulties in some organs that forbids the entry of international builders and developers. The Brazilian ADMINISTRATION should prioritize the resolution of these issues and thus speed up the international real estate investment. The administration is already working on it, by gradually reducing the required paperwork, which has allowed the entrance of a number of listed Real estate investment companies or REITs and portals that highlight/promote the advantages of investing in real estate in Brazil. As a consequence, the area has increased its value by 30% during 2009, such as Natal or Fortaleza.

There are several real estate developers who personally have told me that they run out of product in a considerably short period of time once it becomes available in the market, and in some cases is sold over planes. Bear in mind that only in the country’s domestic residential market there is a deficit of eight million homes in the short term (e.g, buyers of first residences ), and the fact that Brazil is hosting the World Cup in 2014 and the Olympic Games in 2016, it will cause significant property investments …The opportunity for new investments in infrastructure (roads, bridges, hotels, etc. .) will become available soon, in other words, new business opportunities in the largest economy of Latin America and the 8th world economy, according to World Bank data. Brazil is a stable economy with a consolidated democracy.

Given such a favorable market situation, and features so difficult to find in current times, I recommend that each one of you analyze the information above mentioned and come up with a personal conclusion.