Brazil is widely considered one of the best places to invest in the world. It offers political and economic stability, strong infrastructure, booming tourism and an incredibly diverse market. Better still, it is set for substantial growth over the next twenty years—meaning it is more than a good time to invest in Brazil.
The country experienced soaring levels of foreign direct investment last year. According to the Central Bank, FDI was recorded at $90.6 billion, which was 93% higher than in 2021.
In addition to the usual drivers, a devalued currency is making the Brazilian market all the more attractive in 2023. As investors look to explore new markets, we discuss why Brazil should be at the top of your list.
An economy powered by agriculture
Brazil boasts one of the largest economies on the planet thanks to its rich store of natural resources, including oil, timber, minerals, and agricultural products.It is an agricultural giant, supplying 10% of the world’s food, and the industry accounts for around a quarter of the country’s total GDP.
The country is the largest oil producer in Latin America and a leading producer of biofuels. It is home to the Amazon rainforest, as well as the 4th largest reserve of nickel (used to power electric vehicles). This means, in the years to come, Brazil will have a major role to play in the fight against global warming.
A leading travel destination
As the largest country in South America, and the 5th largest country in the world, Brazil is extremely diverse. Even the weather conditions vary by region—with a humid subtropical climate in the south, and a semiarid climate in the northeast.
Major cities such as Rio de Janeiro and São Paulo lie in the southeast. This is Brazil’s wealthiest region. Often dubbed the “Locomotive of Brazil”, São Paulo is responsible for 40% of the country’s GDP, and 55% of Venture Capital Firms in Brazil are located here. With this, Brazil’s southeastern cities offer a very high standard of living and are major hubs for tourists and expats alike.
Visitors can also be found in the northeast, particularly along the coast, as well as further south in thriving beach destinations like Florianópolis. Florianópolis has been named the Safest Capital City in Brazil (lowest crime rate*), and in December, the coastal city ranked #7 in Time Out Magazine for Most Airbnb Searches globally.
An attractive market for foreigners
More and more expats are landing on Brazil as their chosen destination. With its warm climate, strong infrastructure and affordable prices, it is a great place to live and retire. Likewise, many consider Brazil an ideal spot for a second home or investment property.
The average price of a city centre apartment in Brazil is 8,535.71 Brazilian reals per square metre ($1,695); this compares to $4,577 in the U.S.
As you might expect, Rio de Janeiro and São Paulo represent the most expensive markets. That said, these markets remain much more affordable than their equals in the U.S. The average square meter price of residential real estate in Rio de Janeiro stands at 9,700 Brazilian reals ($1,926), and in São Paulo, at around 9,400 Brazilian reals($1,867).
Is it a good time to invest in property in Brazil?
Driven by rising property demand, Brazil’s house prices grew 6.16%year-over-year in 2022. This marked the largest YoY increase in house prices since December 2014, which saw a 6.7% growth.
São Paulo saw a reasonable 5.06% house price increase in the year, higher than Rio de Janeiro (2.2%) and Brasilia (1.31%). Meanwhile, in Florianópolis, property prices increased by an impressive 11.33% as coastal cities continue to gain popularity.
In Brazil, the cost of living per person is 3 times lower than it is in the U.S. Because of this, many expats head here in search of a high quality of life for a lower cost. Moreover, the Brazilian Real is near a 20-year low vs USD/EUR/GBP, meaning foreign investors can get a lot more for their money in Brazil right now.
With demand on the up, property prices rising, and the prospect of a favourable exchange rate, it is certainly a good time for foreign buyers to invest in Brazil. If you’d like to capitalise on this buoyant and growing market, get in touch to discuss available investment opportunities today.
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