The growth rate of investments by Brazilians in real estate in the US and Portugal has reached200%, according to consultants.
High interest rates and uncertainty about inflation control
High interest rates and uncertainty about controlling inflation are encouraging Brazilian investors to invest in real estate in the US and Portugal. Research by Faccin Investments, an advisory firm that assists Brazilian citizens in both countries, shows an increase of 250% in real estate purchases and 225% in real estate sales transactions in the last quarter of 2022 compared to the same period in 2021.
Buying and selling real estate
According to the study, real estate purchases amounted to about US$72 million (R$379 million) and sales amounted to US$22.4 million (R$117 million) between October and December 2022. These funds were invested both by those who decided to move from Brazil and by investors. A common trait among these families, usually entrepreneurs, is the desire to "dollarize" their capital to protect it from the current economic situation in Brazil. "We have three types of clients: families seeking a definitive change, especially when it comes to Portugal; entrepreneurs buying real estate to expand their assets internationally; and others, around 20%, who simply want additional income by renting out properties abroad," says Cassio Faccin, CEO of Faccin Investments.
Documentation and the process of buying real estate
The documentation for buying real estate in the United States and Portugal is not very different from what is required in the Brazilian real estate market, according to experts. They note that you should pay attention to the language and the specific taxes of each country. Termination of a real estate contract, as Brazilian law allows, is rare in the U.S. and Europe. "If [a Brazilian buyer] has a good advisor, the purchase is not difficult. In the U.S., there are fees that need to be paid before the transaction closes," says Bruna Talita, head of international operations at RE/MAX Acerti. "It's common to ask for two installments of the mortgage payment as collateral, and cash is not allowed to avoid money laundering." Another distinguishing feature is the negotiation of property values. While in Brazil it is possible to get a discount on the price offered by the seller, abroad the offer to buy is always made above the initial offer. "Typically, they will verify the Brazilian's financial situation through a bank that operates here and in the country where the property is located," says attorney Cesar Beck.
The Sunshine State
The majority of Brazilians (55%) who buyreal estate in the United States choose Florida, according to the state's real estate association. In terms of real estate transactions in the state, Brazil ranks 4th among all countries, with 6% of sales, representing US$700 million (R$3.7 billion), behind only Canada, Argentina and Colombia, according to the latest "Profile of International Residential Real Estate Activity" report. Among the top five foreign buyers in Florida, Brazilians tend to buy the most expensive properties, with an average price of US$460.7 thousand (R$2.4 million). Approximately 46% of these purchases are financed, and most properties are homes.
Real estate rentals
According to Faccin Investments, demand for rental properties in both the US and Portugal also increased in the last months of 2022. The advisory firm noted an increase of 125% in rental transactions compared to the same period in 2021, representing a total of US$140,000 (approximately R$739,000), an increase of 166% over the previous year. In the U.S., the most competitive market among residential rental properties is Miami-Dade County, with an average of 32 potential tenants per apartment, according to RentCafe's latest report. In Portugal, Lisbon is the most popular area where Brazilians live.
New rules in Portugal
Since 2012, countries in Europe have been competing to attract wealthy immigrants - and their millions - through simplified citizenship and residency permit programs linked to real estate investments. Rising demand and the pandemic have driven up prices. To curb the rise, Portugal in February announced sweeping changes to rules for foreigners, who make up more than 10% of real estate purchases in the country. One of the main changes is the discontinuation of golden visas, the main way to obtain them is to buy property worth 500,000 euros (2.8 million reais). Brazilians are the second most beneficiary citizenship after the Chinese. The Portuguese government will limit visa extensions. Thus, foreigners will only be able to retain the benefits if the property becomes the permanent home of the owner or his descendants, or if the property is rented out for a "long period".
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