Palma do Mar, Brazil
May 19, 2008 | Newsletters
We would like to offer you Palma do Mar, an exclusive development of nearly 500 villa plots located amongst the palm groves in the gentle hills of Jacumã, just moments from the beautiful beach of Carapibus. Each plot has planning permission to build a detached villa with private pool, offering the investor two main exit strategies.
Why Brazil?
- Since 1994 – stable economy & now booming.
- Brazil is one of the world’s four most dynamic global economies, along with Russia, India and China.
- Fast growing, stable top ten global economy with a $1 trillion GDP.
- Middle class expanding and can now buy. Forecast to increase by 65% over the next 10 years giving a housing shortfall of around 8 million properties.
- Massive internal market with Brazilian nationals buying up land and real estate.
- Stable democracy undergoing economic reform.
- Tourist boom with 80% annual increase in Paraiba state.
- Property prices rising at 25% per annum in Paraiba state.
- Program for the Development of Tourism in the North East has invested $736m.
- Steady inflation, falling unemployment and interest rates at the lowest level in recent memory.
- Constant growth in the last few years.
- Natural Industries & resources (Oil, Gas) and not just football and carnival.
Palma do Mar
Palma do Mar will be provided with all infrastructure services including roads, water and electricity, all of which will be in place by January 2010. An extensive communal area which will be home to a club house with swimming pool and gardens, playground and kids club, tennis courts, football pitch and parkland will be included. The club house will also provide restaurant facilities.
The land plots at Palma do Mar already have planning consent for the development of detached villas, so if you wish to build a home on your plot the developer can do this for you. Building your own home is a simple, stress-free method of further capitalising on the investment potential of your villa plot. At present three specific villa options are available in varying sizes.
Increasing demand from local and international developers, allied with local, regional and federal improvements to transport infrastructure, is leading to rising levels of demand from later-stage investors and holiday home buyers. These factors are all placing upward pressure on the value of land in this area of Paraiba. Prices for villa plot development sites in some areas of north-east Brazil have already increased by 50% in the last 12 months and show no sign of slowing down.
Exit Strategy 1
Keep the plot for a minimum of two years until all the infrastructure has been completed by the developer. During that time, we anticipate a 25% per annum growth in prices.
By January 2010 with the infrastructure complete, Brazilians can then get the finance on the plot and project. They cannot get finance on land unless the necessary infrastructure is done first, and then the plots cost much more, up to £48,000. Put simply, the Brazilian market is huge and expanding with demand from a growing middle class set to increase by 65% over a decade, producing a housing shortage of 8 million units.
Similar projects in the area will build all the infrastructure – roads, landscaping, utilities – and then sell on to the Brazilian market at a price of £40-48,000 as the indigenous finance emerges.
Exit Strategy 2
On the other hand, if you retain the plot for two to three years and build a villa with pool, there are additional potential yields of £28-32,000 equity.
With an average plot of some 400 sq.m2 you can construct a 3-4 bedroom villa with a private pool and 60 sq.m2 of terraces, and the developer can do this for a price of £482 per sq.m2. So, for around £76,000, you can have a plot with finished villa and pool – compared with 360 villas on site that are much smaller and start at £84,000.
Regards
Eric Lay
Tel/Fax: (+44) 01954 205266
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