- Title: BRAZIL-REAL ESTATE Real estate prices drop as Brazilian economy falters
- Date: 27th March 2015
- Summary: RIO DE JANEIRO, BRAZIL (RECENT) (REUTERS) VIEW OF COPACABANA AND IPANEMA FROM THE ROOFTOP OF A LUXURY APARTMENT RIO DE JANEIRO, BRAZIL (MARCH 27, 2015) (REUTERS) BEACH FRONT STREET IN THE IPANEMA NEIGHBOURHOOD PEOPLE WALKING ALONG THE BEACH-FRONT WITH COCONUTS IN THE FOREGROUND VARIOUS EXTERIORS OF LUXURY APARTMENTS OVERLOOKING THE BEACH RIO DE JANEIRO, BRAZIL (MARCH 26, 2
- Embargoed: 11th April 2015 13:00
- Keywords:
- Location: Brazil
- Country: Brazil
- Topics: General
- Reuters ID: LVA4GH45IIUNJLVWPYOC5RII6FCT
- Story Text: The once unattainable luxury apartment overlooking Rio de Janeiro's picturesque Copacabana and Ipanema beaches has suddenly become a lot more accessible for investors in the market flush in dollars or euros.
Brazil's once red-hot economy is now just hovering out of recession with the government statistics agency (IBGE) on Friday (March 27) saying it expanded at just 0.1 percent for the year 2014.
Hard times appear to be on the horizon with most observers expecting a painful recession to take hold in 2015.
The sluggish economy and the central bank's plan to scrap its currency intervention program, combined with a growing economic and political crisis in Brazil amid fears of higher U.S. interest rates, have driven Brazil's real currency tumbling to 12-year lows this year.
In March alone, it has crashed 20 percent, which makes it the worst performer among the 152 currencies tracked by Reuters.
But economic doom in Brazil and a cheaper real could mean the time is right for investors to try to snatch up a beach-front apartment overlooking beautiful sun-soaked Ipanema.
The vice-president of Brazil's Civil Construction Union (SINDUSCON), Paulo Fabbriani, told Reuters the weaker currency means properties listed in reais suddenly look a lot more economical for foreigners entering the market with U.S. dollars to invest.
"Right now we are really seeing a strange opportunity in Brazil. Such a quick and intense devaluation of the real means relative prices of our high-end real-estate is really at half price when compared to what they were at, in strong currencies (dollar or euro), four or five months ago," Fabbriani said.
The currency has bounced back some since last week's 12-year low, but it lost more than 1 percent on Friday, leading losses in Latin American foreign exchange markets.
On Friday the real declined 1.3 percent to stand at 3.23 per dollar.
Of course, a luxury apartment steps away from some of the most famous beaches in the world does not come cheap no matter what currency you might be buying it in.
A 200 square meter (2,150 sq ft) apartment in Ipanema with four bedrooms and four baths with a side ocean view was listed at $11,500,000 reais or about $3,560,371 U.S. dollars.
Many other listings were more than double that depending on location, the building, view and any number of other factors.
Still, the head of the luxury real-estate company Judice & Araujo, Federico Judice Araujo told Reuters there is an abundance of properties listed for sale in Rio at the moment making it a buyers' market just as the real has fallen off.
"So the first thing we are seeing on the market, clearly, is a price adjustment, an adjustment in liquidity as far as sellers. And the buyers are being very selective knowing that the market is in favour of buyers. They're negotiating for discounts and as a result are getting good deals," Araujo said.
"With the prices as they are and the real being devalued, real-estate in Brazil, in dollars, euros or pounds, or whichever currency, are much cheaper for these foreign buyers," Araujo added.
For foreigners with the finical means who are looking to make a move or to have a little getaway in Ipanema, the time to dream big might be now.
The drop in real-estate prices in Rio de Janeiro have also come just as the city prepares to host the 2016 Summer Olympics.
How better to enjoy the mega sporting event than from your home-base near the world famous beaches. - Copyright Holder: REUTERS
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