This Blog was created to show to Real Estate investors how to proceed and why make Real Estate business in Brazil, for Brazilians and foreigners. Here you can find greats tips for investments on Brazil, from all kind of news papers, magazines, other blogs, and sure many opinions from the bigger investors all over the world. Because with a maximum security; you for sure, will be able to make an excellent negotiation. Sincerely. Jose Gualberto
Visitor.
Thursday, March 10, 2011
Wednesday, March 9, 2011
Getting Smart!
Pepsi Company and Madonna have recently invested in one of Brazil’s fastest growing markets - Join them today in this unique LOW ENTRY INVESTMENT and profit from Brazils booming economy.
Low entry investment with interest free finance over 60 months - Low monthly payments only $ 533 per month NO DOWM PAY PAYMENT
Own a ultra modern high yielding freehold coconut plantation in Brazil and generate an estimated 20 year + net monthly income of $ 11.000 once the trees have matured {36 month } and start producing.
What’s included ?
I hectare freehold plot 10.000 m2 in the North East of Brazil one of the fastest growing regions .
Coconut plantation plots will form part part of a rural residential touristic complex ,the infrastructure the complex will offer will add value to the plantation plots.
250 plants
Drip irrigation system
3 year intensive crop care during the growing period
Modern management methods in par with international standard
Prices fixed in $ with no down payment and interest free finance
Managed hands free investment
Only a few plots now remain under this investment CONTACT US TODAY for further information
Move over Gatorade and Vitamin Water. There is competition in the beverage case and the Material Girl is one of the first to hop on the newest hydration bandwagon of Brazilian coconut water.
Coconut water is a wildly popular new drink that has recently hit stores all across the country like Whole Foods and other national grocery store chains.
The New York Post just reported that Madonna is investing $1.5 million in one of the largest coconut water manufacturers in the country, Vita Coco. Other celebrities like actor Matthew McConaughey and singer Anthony Kiedis of the Red Hot Chili Peppers are also rumored to soon be lending their cash to help make coconut water more mainstream.
And it’s no wonder. Coconut water is quick becoming a favorite among yoga practitioners, fitness enthusiasts and those just looking for a nutritious way to stay hydrated.
The agreement is the most recent step in PepsiCo’s strategic transformation of its beverage portfolio and marks the company’s entry into the fast-growing market for coconut water, a source of natural hydration popular in Brazil and dozens of other countries.
Amacoco makes and sells Brazil’s top-selling coconut water brands, Kero Coco and Trop Coco, which are highly regarded by consumers as healthy, refreshing hydration drinks. Together they account for the bulk of packaged coconut water sales in the country, making PepsiCo the category leader.
Friday, February 25, 2011
Opening a Bank Account in Brazil
Banking & Opening a Bank Account in Brazil
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Tweet this!Information on opening a Brazilian bank account - what documents to provide - the credit and debit cards, payment methods, cheques and more.
The Brazilian banking system offers a substantial range of services for both private individuals and companies. Banking rules are strictly enforced, and all banking business is closely monitored by the banks themselves and by the Central Bank of Brazil (Banco Central do Brasil).
In addition to the extensive branch network of the major retail banks, many of which have self-service ATM halls, most services available at the bank itself are also available via Internet banking.
Brazilian banks offer current accounts, savings and investment accounts, credit and debit card services, personal loans and overdrafts, and in some cases, foreign exchange services. Local banks will also set up standing orders, accept payment of utility bills and local, state and federal taxes. They also accept instalment payment books (carnê). Instalment books are issued in stores if a person doesn't have a credit card and wishes to pay in several instalments. The instalments are payable either in the store itself or through the banking system.
Types of Account
Current accounts (conta corrente) usually entitle the account holder to a cheque book and/or debit card. These accounts are normally non interest-bearing.
Savings accounts (conta de poupança) pay monthly interest on average daily balances for the month. This rate is currently 0.5 percent over the basic reference rate, (Taxa Referencial - TR). Interest earned on these accounts is tax-free.
Today, many banks combine these two accounts into an investment account (conta de investimento). Deposits are automatically routed to the savings account, and transferred to the current account to cover cheques, debit card payments and cash withdrawals. These accounts are also used for investments in funds, with all investments and redemptions transiting through the account.
Overdrafts (cheque especial) in Brazil are normally by arrangement and subject to the proper credit analysis by the bank. Usually, on opening an account, the bank may make such a credit line available. Interest rates on such facilities are very high.
A cheaper alternative is the personal loan (empréstimo pessoal), repayable in up to 24 or 36 instalments, depending on the bank. Competition is strong and rates vary from bank to bank.
Opening a Bank Account
To open a retail bank account, the following documents are required:
A valid identity document. In the case of a foreigner resident in Brazil, this will mean their foreigner's identity card (Cédula de Identidade para Estrangeiro - CIE) which contains the Registro National De Estrangeiro (RNE)
Individual Taxpayer’s number (Cadastro de Pessoa Física - CPF, also referred to as Cadastro Individual de Contribuintes - CIC)
Proof of domicile (such as a utility bill in the name of the person opening the account)
To obtain the CPF, it is necessary to fill out the application form at any Post Office, branch of Banco do Brasil or branch of the Caixa Econômica Federal and present the documentation required (usually the original or a certified copy of the RNE). There is a small fee. The applicant will receive a counterfoil with a code number. Thereafter, the applicant will be notified to appear at a unit of the Federal Revenue Service and present their documents and the counterfoil in order to obtain their definitive CPF.
In addition, banks may ask for proof of earnings/income, where a salary payment account (conta salário) is to be opened. In this case a valid payslip is enough. The latter is commonly referred to in São Paulo as contra-cheque or hollerith, but local variations of the name exist around Brazil. A conta salário only differs from a normal current account in that the holder of the account may be entitled to a wider range of benefits, for example lower fees on banking transactions.
The bank may also request and verify personal and/or employer references, including valid telephone numbers. Additional information requested may include credit card and/or store card numbers and/or income tax declaration, at the bank’s discretion.
Some banks currently allow accounts to be provisionally opened online, with subsequent presentation of the necessary documentation at the branch of choice.
Using a Brazilian Bank Account
Payments in Brazil are often made with credit or debit cards. International credit cards are widely accepted, although local cash withdrawal services may be restricted in certain cases.
In spite of the high degree of banking automation in Brazil, and the possibility of paying most utility bills online, many Brazilians still pay their bills at the cashier in their local bank. Therefore, be prepared for large queues at cash tills.
Banking is not free in Brazil. Most banks charge a monthly all-in fee for basic services, including a cheque book containing 20 cheques. Depending on the chosen package of services and account balances, banks award points that can be used to defray charges.
Cheque books are still widely used, especially by companies, but are being increasingly replaced by debit cards, especially for retail purchases, since many stores simply no longer accept cheques. Issuing a cheque without sufficient funds is a crime, subject to severe administrative and legal sanctions.
In many bank branches there are cheque dispensers. These function like an ATM, but they issue cheques, usually in sheets containing four cheques and are for those who don't need or want a conventional cheque book. Customers can print out as many cheques as they need, when they need them, subject to their arrangements with the bank. This cheques-on-demand option actually saves banks money that would otherwise be spent in the printing, storage and distribution of conventional cheque books. The number of cheques to which account holders are entitled will be predetermined in the monthly tariff negotiated with the bank.
Opening hours
Most banks are open Monday to Friday from 10:00 to 16:00.
Foreign Currency
The purchase and sale of foreign currency is still one of the most tightly controlled aspects of banking in Brazil. Purchase of foreign currency using a credit card is not permitted. Foreign visitors can normally sell foreign currency on presentation of a valid passport, especially at bank branches located in the major airports. Most bank branches generally only deal in foreign currency on behalf of their clients, and not all branches provide foreign exchange facilities. Foreign currency may also be exchanged at one of the many exchange bureaux (casas de câmbio). The maximum amount of foreign currency that can be brought through customs and into the country is the equivalent of 10,000 reais.
Special situations
Non-resident foreigners in Brazil may hold local currency accounts in Brazil, subject to Heading 1, Chapter 13, Section 1 of the International Capital and Foreign Exchange Market Regulations (Regulamento do Mercado de Câmbio e Capitais Internacionais) of the Central Bank of Brazil.
Foreigners who are temporarily resident in Brazil can hold foreign currency accounts, subject to Heading 1, Chapter 14, Section 7 of the International Capital and Foreign Exchange Market Regulations (Regulamento do Mercado de Câmbio e Capitais Internacionais) of the Central Bank of Brazil.
Funds for investment are registered with the Central Bank of Brazil and in the case of investment funds, with the Brazilian Securities Commission (Comissão de Valores Mobiliários - CVM). In the case of funds entering Brazil in order to open a company, for example, the initial capital is registered with the Department for Foreign Capital and Control and Registration (Fiscalização e Registro de Capitais Estrangeiros - FIRCE). A certificate is issued, which entitles the company to remit future profits and/or dividends and, if necessary, repatriate capital.
For further information from Banco Central do Brasil on the International Capital and Foreign Exchange Search for Market Regulations
In both cases, enquiries should be made directly to the Central Bank.
Lost or Stolen Bank Cards
Any loss or theft should be reported immediately to the bank/credit card company to stop the cheques and/or cancel the card. It is also necessary to go to the nearest police station (delegacia de polícia) to file a formal police report (boletim de ocorrência - BO) as soon as possible.
In the state of São Paulo, lost or stolen documents and cards can be registered on the São Paulo government website. A copy of this registration will need to be shown to the bank. In the event of loss or theft of cheque books and personal documents, call the credit protection agency SERASA.
SERASA
Tel: 11 33 SERASA or (11) 3373 7272
Main Brazilian Banks
Private banks:
Banco Itaú
Bradesco
Santander
Unibanco
The two largest state-owned banks are:
Banco do Brasil
Caixa
The Central Bank of Brazil:
Banco Central do Brasil
Brazilian Portuguese Banking Terminology Guide
English Brazilian Portuguese
ATM/cash dispenser Caixa eletrônica
Bank Banco
Bank account /Conta bancária
Bank book /Caderneta
Bank charges /Taxas bancárias
Bank draft /Saque bancário
Bank loan /Empréstimo bancário
Bank manager /Gerente de banco
Bank note /Cédula bancária
Bank payment slip /Ficha de compensação
Bank rate /Taxa bancária
Bank statement /Extrato bancário
Bank transfer /Transferência bancária
Bankers cheque /Cheque administrativo
Bounce a cheque/ Devolver um cheque
Bounced cheque/ Cheque devolvido
Cash withdrawal /Saque/retirada em dinheiro
Cheque /Cheque
Cheque book /Talão de cheques
Corporate/company account Conta pessoa jurídica
Credit balance /Saldo credor
Credit card /Cartão de crédito
Credit facilities /Linhas de crédito
Credit card invoice /Fatura de cartão de crédito
Current account /Conta corrente
Debit /Débito
Debit balance /Saldo devedor
Deposit/ Depósito
Deposit account /Conta de depósitos
Deposit slip /Ficha de depósito
Direct debit /Débito direto
Drawee's receipt /Recibo de sacado
Exchange Bureaux /Casa de câmbio
Exchange rate /Taxa de câmbio/taxa cambial
Fixed rate /Taxa fixa
Individual/personal account Conta pessoa física
Interest rate /Taxa de juros
Investment bank Banco de investimentos
Joint accounts /Contas conjuntas
Multiple bank /Banco múltiplo
Non-resident account/ Conta de não residente
Overdraft account Cheque especial/conta garantida
Payment slip /Ficha de pagamento
Private bank /Banco privado
Revolving Overdraft /Conta garantida rotativa
Salary account Conta salário
Savings account /Conta poupança/caderneta de poupança
Securities/ Títulos e valores mobilários
Share /Ação
Shareholder/ Acionista
Signature card/ Cartão de assinaturas
Standing order /Débito direto
Take out a mortgage/ Contratar um empréstimo hipotecário
Travellers cheques / Cheques de viagem
Variable rate /Taxa variável / flutuante
Related Information search for:
Information from the Brazil Ministry of Finance on the CPF
AngloINFO INFOrmation page, The CPF number in Brazil
Information from the Banco Central do Brasil on different payment methods in Brazil.
Information from the Banco Central do Brasil on Brazilian banknotes and coins.
Share on Facebook
Tweet this!Information on opening a Brazilian bank account - what documents to provide - the credit and debit cards, payment methods, cheques and more.
The Brazilian banking system offers a substantial range of services for both private individuals and companies. Banking rules are strictly enforced, and all banking business is closely monitored by the banks themselves and by the Central Bank of Brazil (Banco Central do Brasil).
In addition to the extensive branch network of the major retail banks, many of which have self-service ATM halls, most services available at the bank itself are also available via Internet banking.
Brazilian banks offer current accounts, savings and investment accounts, credit and debit card services, personal loans and overdrafts, and in some cases, foreign exchange services. Local banks will also set up standing orders, accept payment of utility bills and local, state and federal taxes. They also accept instalment payment books (carnê). Instalment books are issued in stores if a person doesn't have a credit card and wishes to pay in several instalments. The instalments are payable either in the store itself or through the banking system.
Types of Account
Current accounts (conta corrente) usually entitle the account holder to a cheque book and/or debit card. These accounts are normally non interest-bearing.
Savings accounts (conta de poupança) pay monthly interest on average daily balances for the month. This rate is currently 0.5 percent over the basic reference rate, (Taxa Referencial - TR). Interest earned on these accounts is tax-free.
Today, many banks combine these two accounts into an investment account (conta de investimento). Deposits are automatically routed to the savings account, and transferred to the current account to cover cheques, debit card payments and cash withdrawals. These accounts are also used for investments in funds, with all investments and redemptions transiting through the account.
Overdrafts (cheque especial) in Brazil are normally by arrangement and subject to the proper credit analysis by the bank. Usually, on opening an account, the bank may make such a credit line available. Interest rates on such facilities are very high.
A cheaper alternative is the personal loan (empréstimo pessoal), repayable in up to 24 or 36 instalments, depending on the bank. Competition is strong and rates vary from bank to bank.
Opening a Bank Account
To open a retail bank account, the following documents are required:
A valid identity document. In the case of a foreigner resident in Brazil, this will mean their foreigner's identity card (Cédula de Identidade para Estrangeiro - CIE) which contains the Registro National De Estrangeiro (RNE)
Individual Taxpayer’s number (Cadastro de Pessoa Física - CPF, also referred to as Cadastro Individual de Contribuintes - CIC)
Proof of domicile (such as a utility bill in the name of the person opening the account)
To obtain the CPF, it is necessary to fill out the application form at any Post Office, branch of Banco do Brasil or branch of the Caixa Econômica Federal and present the documentation required (usually the original or a certified copy of the RNE). There is a small fee. The applicant will receive a counterfoil with a code number. Thereafter, the applicant will be notified to appear at a unit of the Federal Revenue Service and present their documents and the counterfoil in order to obtain their definitive CPF.
In addition, banks may ask for proof of earnings/income, where a salary payment account (conta salário) is to be opened. In this case a valid payslip is enough. The latter is commonly referred to in São Paulo as contra-cheque or hollerith, but local variations of the name exist around Brazil. A conta salário only differs from a normal current account in that the holder of the account may be entitled to a wider range of benefits, for example lower fees on banking transactions.
The bank may also request and verify personal and/or employer references, including valid telephone numbers. Additional information requested may include credit card and/or store card numbers and/or income tax declaration, at the bank’s discretion.
Some banks currently allow accounts to be provisionally opened online, with subsequent presentation of the necessary documentation at the branch of choice.
Using a Brazilian Bank Account
Payments in Brazil are often made with credit or debit cards. International credit cards are widely accepted, although local cash withdrawal services may be restricted in certain cases.
In spite of the high degree of banking automation in Brazil, and the possibility of paying most utility bills online, many Brazilians still pay their bills at the cashier in their local bank. Therefore, be prepared for large queues at cash tills.
Banking is not free in Brazil. Most banks charge a monthly all-in fee for basic services, including a cheque book containing 20 cheques. Depending on the chosen package of services and account balances, banks award points that can be used to defray charges.
Cheque books are still widely used, especially by companies, but are being increasingly replaced by debit cards, especially for retail purchases, since many stores simply no longer accept cheques. Issuing a cheque without sufficient funds is a crime, subject to severe administrative and legal sanctions.
In many bank branches there are cheque dispensers. These function like an ATM, but they issue cheques, usually in sheets containing four cheques and are for those who don't need or want a conventional cheque book. Customers can print out as many cheques as they need, when they need them, subject to their arrangements with the bank. This cheques-on-demand option actually saves banks money that would otherwise be spent in the printing, storage and distribution of conventional cheque books. The number of cheques to which account holders are entitled will be predetermined in the monthly tariff negotiated with the bank.
Opening hours
Most banks are open Monday to Friday from 10:00 to 16:00.
Foreign Currency
The purchase and sale of foreign currency is still one of the most tightly controlled aspects of banking in Brazil. Purchase of foreign currency using a credit card is not permitted. Foreign visitors can normally sell foreign currency on presentation of a valid passport, especially at bank branches located in the major airports. Most bank branches generally only deal in foreign currency on behalf of their clients, and not all branches provide foreign exchange facilities. Foreign currency may also be exchanged at one of the many exchange bureaux (casas de câmbio). The maximum amount of foreign currency that can be brought through customs and into the country is the equivalent of 10,000 reais.
Special situations
Non-resident foreigners in Brazil may hold local currency accounts in Brazil, subject to Heading 1, Chapter 13, Section 1 of the International Capital and Foreign Exchange Market Regulations (Regulamento do Mercado de Câmbio e Capitais Internacionais) of the Central Bank of Brazil.
Foreigners who are temporarily resident in Brazil can hold foreign currency accounts, subject to Heading 1, Chapter 14, Section 7 of the International Capital and Foreign Exchange Market Regulations (Regulamento do Mercado de Câmbio e Capitais Internacionais) of the Central Bank of Brazil.
Funds for investment are registered with the Central Bank of Brazil and in the case of investment funds, with the Brazilian Securities Commission (Comissão de Valores Mobiliários - CVM). In the case of funds entering Brazil in order to open a company, for example, the initial capital is registered with the Department for Foreign Capital and Control and Registration (Fiscalização e Registro de Capitais Estrangeiros - FIRCE). A certificate is issued, which entitles the company to remit future profits and/or dividends and, if necessary, repatriate capital.
For further information from Banco Central do Brasil on the International Capital and Foreign Exchange Search for Market Regulations
In both cases, enquiries should be made directly to the Central Bank.
Lost or Stolen Bank Cards
Any loss or theft should be reported immediately to the bank/credit card company to stop the cheques and/or cancel the card. It is also necessary to go to the nearest police station (delegacia de polícia) to file a formal police report (boletim de ocorrência - BO) as soon as possible.
In the state of São Paulo, lost or stolen documents and cards can be registered on the São Paulo government website. A copy of this registration will need to be shown to the bank. In the event of loss or theft of cheque books and personal documents, call the credit protection agency SERASA.
SERASA
Tel: 11 33 SERASA or (11) 3373 7272
Main Brazilian Banks
Private banks:
Banco Itaú
Bradesco
Santander
Unibanco
The two largest state-owned banks are:
Banco do Brasil
Caixa
The Central Bank of Brazil:
Banco Central do Brasil
Brazilian Portuguese Banking Terminology Guide
English Brazilian Portuguese
ATM/cash dispenser Caixa eletrônica
Bank Banco
Bank account /Conta bancária
Bank book /Caderneta
Bank charges /Taxas bancárias
Bank draft /Saque bancário
Bank loan /Empréstimo bancário
Bank manager /Gerente de banco
Bank note /Cédula bancária
Bank payment slip /Ficha de compensação
Bank rate /Taxa bancária
Bank statement /Extrato bancário
Bank transfer /Transferência bancária
Bankers cheque /Cheque administrativo
Bounce a cheque/ Devolver um cheque
Bounced cheque/ Cheque devolvido
Cash withdrawal /Saque/retirada em dinheiro
Cheque /Cheque
Cheque book /Talão de cheques
Corporate/company account Conta pessoa jurídica
Credit balance /Saldo credor
Credit card /Cartão de crédito
Credit facilities /Linhas de crédito
Credit card invoice /Fatura de cartão de crédito
Current account /Conta corrente
Debit /Débito
Debit balance /Saldo devedor
Deposit/ Depósito
Deposit account /Conta de depósitos
Deposit slip /Ficha de depósito
Direct debit /Débito direto
Drawee's receipt /Recibo de sacado
Exchange Bureaux /Casa de câmbio
Exchange rate /Taxa de câmbio/taxa cambial
Fixed rate /Taxa fixa
Individual/personal account Conta pessoa física
Interest rate /Taxa de juros
Investment bank Banco de investimentos
Joint accounts /Contas conjuntas
Multiple bank /Banco múltiplo
Non-resident account/ Conta de não residente
Overdraft account Cheque especial/conta garantida
Payment slip /Ficha de pagamento
Private bank /Banco privado
Revolving Overdraft /Conta garantida rotativa
Salary account Conta salário
Savings account /Conta poupança/caderneta de poupança
Securities/ Títulos e valores mobilários
Share /Ação
Shareholder/ Acionista
Signature card/ Cartão de assinaturas
Standing order /Débito direto
Take out a mortgage/ Contratar um empréstimo hipotecário
Travellers cheques / Cheques de viagem
Variable rate /Taxa variável / flutuante
Related Information search for:
Information from the Brazil Ministry of Finance on the CPF
AngloINFO INFOrmation page, The CPF number in Brazil
Information from the Banco Central do Brasil on different payment methods in Brazil.
Information from the Banco Central do Brasil on Brazilian banknotes and coins.
Wednesday, February 9, 2011
Interview
Interview with the Inter-American Development Bank (IADB)
Please see below a recorded interview we undertook with Bruno Saraiva, a Brazilian economist and sociologist at the Inter-American Development Bank (IADB). We discussed a range of issues related to his work in Brazil including short / medium / long term growth prospects; Brazil’s positioning on the global stage; its relationship with other economies both developed and developing; impending challenges; housing policy; dealing with the issue of favelas; the new government’s understanding of the needs of poorer sections of society; other infrastructural projects being undertaken by the IADB and the country’s relatively low positioning on the 2011 Index of Economic Freedom amongst other subjects…
Thursday, January 27, 2011
Wednesday, January 26, 2011
January / February 2011 Brazil
January / February 2011 Brazil Real Estate & Land Investor Newsletter
As the country adjusts to a revitalised Workers Party cabinet, newly selected president of Brazil’s Central Bank – Alexandre Tombini – stated that he will not allow housing credit to reach a ‘bubble like proportions as was similar to many other nations of the world.’ President of the Brazilian Bank Federation Fábio Barbosa – whilst pointing to expectations of a 40 percent growth in housing credit in 2011 (after a 50 percent growth in 2010) – further stated there was very little chance of a bubble due to net mortgage finance levels forming just under 4 percent of GDP.The country’s low cost housing sector confronted renewed waves of criticism. As a result of what was a horrific start to the new year, floods in the state of Rio de Janeiro killed over 800 and displaced 1000’s of families who lived in ramshackle buildings, often on irregular and highly prone land. The catastrophe has ignited serious political and economic debate with even the new President herself questioning: “when there aren’t housing policies, where are people who earn no more than twice the minimum wage going to live?” The ‘Minha Casa, Minha Vida’ housing programme also came under fire with one of the initial projects in Bahia receiving a torrent of negative press as a result of a range of problems emerging including arrears; abandoned apartments; squatting and illegal rental agreements / sales.
In other news, the BNDES (Brazil’s Development Bank) reported a 23 percent increase (by R$ 168.4 billion) in disbursements made when comparing 2010 to 2009 with a significant proportion allocated to spending on the development of industry (53 percent – including the growth of the country’s petroleum sector); infrastructure (31 percent) and commerce / services (16 percent).
January 2011 Factfile
This month’s factfile shows general stable growth patterns across all real estate related statistics analysed. As the SELIC rate of interest was raised to 11.25 percent – one of the highest in the world – Dilma Rousseff and Central Bank heads announced plans to implement a regime of further inflationary control measures. A survey of leading analysts conducted by the ‘Focus’ organisation nevertheless still expects consumer prices to increase to 5.53 percent by the close of 2011 (above the current 4.5 percent target level). The survey also estimated a slowdown in GDP growth to 4.5 percent in both 2011 and 2012 (compared to 7 percent in 2010). According to the Getulio Vargas Foundation (FGV), the National Index of Construction Cost (INCC-M) rose 0.37 percent in January 2011, after increasing by 0.59 percent in December last year. In the last 12 months, the index recorded an increase of 7.42 percent.
Wednesday, January 19, 2011
My house, my life...
Minha Casa, Minha Vida’ (‘My House, My Life’) Enters a New Era
As it was announced that the initial ‘Minha Casa, Minha Vida’ (‘My House, My Life’) programme had failed to meet target levels of 1 million units by the close of 2010 (816,268 had been authorised), the Brazilian government has introduced a series of modifications with the aim of accelerating the construction of housing in a sector that remains considerably under- supplied.
In addition to the decision of extending the threshold of the industrial products tax (Imposto sobre Produtos Industrializados) and improvements to the social security finance contribution and social intergration programmes (Contribuição para o Financiamento da Seguridade Social / Programa de Integração Social) – a number of changes have been formally announced, amongst mixed reviews:
Construction on Unregulated Land
According to the Ministry of Cities, the resolution of allowing the development of real estate on land which is pending regulation is focused on speeding up the current slow moving completion times apparent in even the largest construction projects in the country. Furthermore, it has an added objective of enabling land which currently house favelas (urban slum communities) to be regenerated and modernised – particularly in the metropolitan regions.
The plans have provoked a series of discussions amongst real estate professionals with the main concern being related to the realism of undertaking such projects. In an interview with Construção Magazine, Geraldo de Paula Eduardo, executive director of housing APEOP (the São Paulo Association of Public Work Officials) debates: “the case of construction on non-regularised land will create more difficulties than what policy makers envisage – for example, how can delivered housing units be formally registered at the cartório [official localised property / land registration offices]?” There is also the risk that real estate that is built on unregulated land could be sold ‘under the table’. In the proposals, the Ministry of Cities has stated it is developing mechanisms that will facilitate the issue of official registration – although this is going through the initial legislative stages and no detailed clarification has been made.
Setting Maximum Limits on House Pricing
Another issue that has long been debated is with regards to the inflationary pressures on the construction industry placing pressure of sales prices. According to Inês Magalhães, national secretary of housing: “with the policy of valuing wage levels in line with house price ceilings, more families will have access to affordable housing.”
However, as a recent analysis undertaken by the Brazil Real Estate & Land Investment Guide demonstrates, the reality does not seem in line with the minister’s statement. As part of our business plan in conjunction with EXITUS Construction Brazil for the ‘Fez Tá Pronto’ low income housing development projects, we analysed 18 ‘Minha Casa, Minha Vida’ (MCMV) housing units on the market in the state of Rio de Janeiro (a region, according to the João Pinheiro Foundation, with one of the largest proportions of the housing deficit in Brazil) producing an average sales price of R$ 105,190. Putting these into the Caixa Econômica Federal (the public bank that administer the housing programme) simulator – a monthly payment for a low income housing unit (assuming the full MCMV subsidy is provided) will be R$ 541.73. Looking at wage levels, on the assumption that the majority would be working in basic skilled level jobs which – according to Law nº 5.627 enacted on 28th December 2009 – would produce a maximum salary of R$ 665.77, buying a property would not be a feasible option in terms of affordability (please feel free to email me at gbetto_ce@hotmail.com for more information on our research). According to José Carlos Martins, vice presidente of the CBIC (Câmara Brasileira da Indústria da Construção, the Brazilian Construction Industry’s Chamber of Commerce) in the Construção Magazine: “the situation has become inconsistent resulting in a significant loss in the purchasing power of low income real estate.”
Commercial real estate construction
Another prominent introduction is the allowance of commercial property development within MCMV projects. The aim of this is to create business activity within the condominiums which will help with ongoing maintenance costs whilst generating economic activity amongst local residents. According to Inês Magalhães: “we have had much difficulty in intensifying low income housing construction in centralised areas – this alteration will contribute to assisting this problem.”
The main criticism has been that most development companies are having enough difficulty making projects viable in the first place – adding the costs of developing commercial space would have to be incorporated into the final sales price which is already being pushed beyond the realms of the realistic affordability levels, as discussed above. José Carlos Molina, vice president of public housing Sinduscon-SP (the Union of Construction Industry, São Paulo) also stated to the Construção Magazine that: “despite being a good business opportunity, it is still unclear whether contractors will pay for these units or not – something that will only be clarified once the buildings are completed.”
In addition to the decision of extending the threshold of the industrial products tax (Imposto sobre Produtos Industrializados) and improvements to the social security finance contribution and social intergration programmes (Contribuição para o Financiamento da Seguridade Social / Programa de Integração Social) – a number of changes have been formally announced, amongst mixed reviews:
Construction on Unregulated Land
According to the Ministry of Cities, the resolution of allowing the development of real estate on land which is pending regulation is focused on speeding up the current slow moving completion times apparent in even the largest construction projects in the country. Furthermore, it has an added objective of enabling land which currently house favelas (urban slum communities) to be regenerated and modernised – particularly in the metropolitan regions.
The plans have provoked a series of discussions amongst real estate professionals with the main concern being related to the realism of undertaking such projects. In an interview with Construção Magazine, Geraldo de Paula Eduardo, executive director of housing APEOP (the São Paulo Association of Public Work Officials) debates: “the case of construction on non-regularised land will create more difficulties than what policy makers envisage – for example, how can delivered housing units be formally registered at the cartório [official localised property / land registration offices]?” There is also the risk that real estate that is built on unregulated land could be sold ‘under the table’. In the proposals, the Ministry of Cities has stated it is developing mechanisms that will facilitate the issue of official registration – although this is going through the initial legislative stages and no detailed clarification has been made.
Setting Maximum Limits on House Pricing
Another issue that has long been debated is with regards to the inflationary pressures on the construction industry placing pressure of sales prices. According to Inês Magalhães, national secretary of housing: “with the policy of valuing wage levels in line with house price ceilings, more families will have access to affordable housing.”
However, as a recent analysis undertaken by the Brazil Real Estate & Land Investment Guide demonstrates, the reality does not seem in line with the minister’s statement. As part of our business plan in conjunction with EXITUS Construction Brazil for the ‘Fez Tá Pronto’ low income housing development projects, we analysed 18 ‘Minha Casa, Minha Vida’ (MCMV) housing units on the market in the state of Rio de Janeiro (a region, according to the João Pinheiro Foundation, with one of the largest proportions of the housing deficit in Brazil) producing an average sales price of R$ 105,190. Putting these into the Caixa Econômica Federal (the public bank that administer the housing programme) simulator – a monthly payment for a low income housing unit (assuming the full MCMV subsidy is provided) will be R$ 541.73. Looking at wage levels, on the assumption that the majority would be working in basic skilled level jobs which – according to Law nº 5.627 enacted on 28th December 2009 – would produce a maximum salary of R$ 665.77, buying a property would not be a feasible option in terms of affordability (please feel free to email me at gbetto_ce@hotmail.com for more information on our research). According to José Carlos Martins, vice presidente of the CBIC (Câmara Brasileira da Indústria da Construção, the Brazilian Construction Industry’s Chamber of Commerce) in the Construção Magazine: “the situation has become inconsistent resulting in a significant loss in the purchasing power of low income real estate.”
Commercial real estate construction
Another prominent introduction is the allowance of commercial property development within MCMV projects. The aim of this is to create business activity within the condominiums which will help with ongoing maintenance costs whilst generating economic activity amongst local residents. According to Inês Magalhães: “we have had much difficulty in intensifying low income housing construction in centralised areas – this alteration will contribute to assisting this problem.”
The main criticism has been that most development companies are having enough difficulty making projects viable in the first place – adding the costs of developing commercial space would have to be incorporated into the final sales price which is already being pushed beyond the realms of the realistic affordability levels, as discussed above. José Carlos Molina, vice president of public housing Sinduscon-SP (the Union of Construction Industry, São Paulo) also stated to the Construção Magazine that: “despite being a good business opportunity, it is still unclear whether contractors will pay for these units or not – something that will only be clarified once the buildings are completed.”
Wednesday, January 12, 2011
Brazil House Prices.
Brazil House Price Index Reaching Final Stages
January 11th, 2011With the aim of bring further transparency into Brazil’s real estate market, a new index that will measure changes in property values by type, over time and across geographic regions is in its final stages – initially for commercial property in the country’s major cities but with wider objectives to move into the residential sector.
Developed by the Getúlio Vargas Foundation (a leading academic research institute in Brazil) in coordination with the Brazilian Association of Closed Pension Funds (Associação Brasileira de Entidades Fechadas de Previdência Complementar or ABRAPP), the ‘Index of Profitability of the Brazil Real Estate Market’; also known as ‘IBRI’ (Índice de Referência de Rentabilidade do Mercado Imobiliário Brasileiro); will contain regularly updated information on values, transaction levels, income and expenditure with the primary objective of better monitoring of Brazilian real estate assets – viewed as a natural progress as the industry continues its maturation process.
In terms of how the index has been compiled, according to coordinator of the project from the Getúlio Vargas Foundation Paulo Picchetti (in a previous interviewed undertaken with the Brazil Real Estate & Land Investment Guide): “the IBRI follows international standards for measuring the overall profitability of investments in commercial real estate [namely shopping centres, commercial offices, industrial units and garages amongst others]. In short, price appreciation is measured through the evaluations and the flow of revenue through rents / other income reported by the informants – during the process, we have:
- Developed confidential relationships within Brazil’s commercial real estate industry in order to analyse historical performance (on a per state basis);
- Converged the calculation formulas primarily used by the NCREIF (National Council for Real Estate Investment Fiduciaries) with those specific to Brazil’s commercial property sector;
- Evaluated unsold commercial properties in the Brazilian marketplaces followed by the subsequent exploration of potential alternatives and their comparative advantages / disadvantages;
- Ensured that well-defined governance structures are in place that will provide ongoing transparency and credibility to the indices;
- Constructed a comprehensive database designed to increase information and understanding about the Brazilian commercial property industry combined with the accurate presentation of the various profitability indices.”
An article in construction magazine PINI showed that opinion amongst Brazil real estate specialists over the IBRI index remains divided. Celso Petrucci, chief economist at Secovi-SP (the Union of Housing, São Paulo) believes that increased transparency will serve to boost the attraction of investment from both a domestic and international perspective: “with the amount of equity built over the last few years the index will enable it to be possible to have a starting point for a more rational and well-measured investment culture.” He also highlights that the index involves the participation of serious companies – including Cyrela Commercial Properties, CB Richard Ellis, Colliers International, Jones Lang Lasalle, Banco Brascan and Banco Itaú amongst others – which serves to add further kudos. Radegaz Nasser Junior, vice president of institutional relations at IBAP (the Brazilian Institute of Evaluation and Engineering Skills), on the other hand, questions the index’s realism with the Brazilian real estate market arguing that the variations are too huge to be evaluated accurately, stating: “even the same type of properties located on the same street may differ by over a double due to the way they are owned amongst a variety of other factors.” He also moots the possibility of data being handled in accordance with the interests of companies that will integrate into the database of IBRI. In response, Mr Pichetti stated: ”we have studied how the international real estate market has measured the performance of its assets and adapted these methodologies to the national market;” with Safady adding “there is also an advisory board composed of a variety of industry players to minimize this risk.”
Wednesday, January 5, 2011
Brazil Real Estate & Land Investors 2011 Report
So what’s in store for 2011? The majority of international investors continue to remain bullish about Brazil – an entirely justified perspective for many reasons including rising incomes, lower unemployment, an asian-driven commodity boom, gigantic oil discoveries, up and coming major sporting / high profile events, oil findings, a vigilant banking system to name a few. However, as with any inflationary market, business risks need to be taken into account – from a macro-economic perspective, examples include a highly valued currency that is continuing to lose international competiveness (whilst weighing down the trade-weighted exchange rate and boosting consumer costs); a growing current account deficit; low comparative international savings levels; the ever rising need to improve infrastructure as well as low comparative innovatory and education levels. In 2010, perhaps more than ever before, it has become clear that the key to Brazil’s continued success is for the nation to not become complacent and take advantage of the wave of ‘feel good factors’ that have been sweeping the country in recent years.
For the real estate and land investor – despite possible issues related to over-supply, rising mortgage finance costs and ownership – industry professionals within the country remain positive that, for at least the next few years, the housing market will remain buoyant. In terms of overseas interest, 2010 events such as the financial turmoil in the Eurozone and the repercussions of the credit crisis in countries such as the USA and the UK have made property / land investing in Brazil a challenge – particularly combined with the fact that real estate finance for foreigners is not available (bar some development finance programmes are offered by some constructors). Other issues commonly noted include excessive bureaucracy, title protection, exchange rate issues, obtaining a sufficiently valid investment visa and acquiring real estate related assets transparently in accordance with international legal standards.
Nevertheless, as these issues are unlikely to disappear any time soon, investors – including an increasing amount from other so-called ‘emerging’ nations such as China, India and South Korea – have been striving to work through the complex system. We believe that it is a task that is well worth undertaking considering the wealth of opportunities available in a country with such strong medium to long term growth prospects.
What follows takes both macro and micro based outlooks on factors facing the Brazilian real estate and land industry at the close of 2010.
Below is the section breakdown:
1. Welcome
2. Brazil Under the Rule of Dilma Rousseff
3. Brazil’s 2011 Economic Leadership Team
4. Brazil’s Involvement in the Currency Wars
5. Bringing Down Brazil’s National Interest Rate
6. Concerns Over Brazil’s Domestic Savings Levels
7. The Petrobras Phenomenon
8. The Brazil-China Relationship
9. House Price Inflation in Brazil
10. Brazil’s Real Estate Finance Market
11. Brazil’s Housing Deficit
12. Brazil State Housing Programme Examples
13. Brazil’s Construction Industry
14. Labour Supply in the Construction Industry
15. Low Income Housing / ‘Minha Casa, Minha Vida’
16. The Regeneration of Brazil’s Favelas (Urban Slums)
17. Brazil’s Low Sanitation Levels
18. Brazil’s Housing Industry Sustainability
19. Brazil’s Retail Real Estate Market
20. Brazil’s Other Infrastructural Challenges in 2011
21. Brazil’s Growth Acceleration Programme (PAC)
22. Relieving Congestion in Major Cities – Case Study: São Paulo
23. Brazil’s Demographic Movements
24. Removing Poverty in Brazil
25. Bolsa Família (Brazil’s Family Grant Programme)
26. Education in Brazil
27. Brazil’s Informal Economy
28. Bringing More Business Transparency into Brazil
Brazil Experts Discuss the 2011 Residential Property Market
Brazil Experts Discuss the 2011 Residential Property Market
Shortly before the Christmas break, a group of Brazil’s leading real estate specialists – including construction company CEOs, engineer / architecture professionals and university professors* – convened to discuss the future of the market as the country enters 2011.The general consensus was that the residential real estate market will grow in 2011 prompted by the pent up demand formed during the brief downturn of between 2007 and 2009. This pattern will be fuelled by increased mortgage credit availability, longer terms and lower interest rates as well as a healthy employment market, rising middle class purchasing power and increased international investment interest.
For high income earners, demand levels are expected to remain the same as with 2010. For middle-income earners, it was stated that the demand should remain broadly buoyant but some noted of a slight over supply in some regions. For the low income housing sector, demand is expected to be higher than in 2010 and 2009 – yet, whilst viewed as positive news for the industry as a whole, several concerns remain.
As it was announced by Caixa Econômica Federal that the allocation of the ‘Minha Casa, Minha Vida’ (‘My House, My Life’) project had not reached its target rate of 1 million housing units (875,000 units were allocated finance by the close of 2010) – debate was raised about the progress of many of projects currently underway. Some of the bottlenecks include the lack of defined price ceilings that work in line with affordability levels; off-putting bureaucracy levels; the issue of rising construction costs placing difficulties on making projects viable in line with the market and the lack of suitable land in urbanised areas close to employment, schools, health care and other essential amenities.
We discuss the above issues and more in detail in the 2011 Brazil Real Estate and Land Investor report.
Please click here to head direct to the introductory blog post and free download.
*Some of the prominent figures present included: Alessandro Olzon Vedrossi (Investor Relations, Brookfield Real Estate Incorporations); Alex Kenya Abiko (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo); Carlos Terepins (Even Constrution and Incorporations); Claudio Tavares de Alencar (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo); Daniel Citron (President of Tishman Speyer Brazil); Eliane Monetti (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo); Eric Cozza (Editorial Director of the Téchne Magazine); Fernando Bontorim Amato (Development Director at Y Takaoka); Marcelo Vespoli Takaoka (CEO of Y Takaoka); João da Rocha Lima Jr. (Associate Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo and Director of ‘Urban Systems Brasil’); José Romeu Ferraz Neto (Director of RFM Constructions); Mario Rocha Neto (Operations Executive Officer at Gafisa); Roberto Aflalo Filho (CEO of Casa.com.br); Roberto Sampaio (Head of Engineering at HSBC Brazil) and Sergio Alfredo Rosa da Silva (Professor at the Civil Engineering Department at the Polytechnic School at the University of São Paulo).
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