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The real estate industry in Brazil has been buoyed by a new survey that shows that hosting an international football tournament will do more to boost a nation that any other sporting event. With excitement already building for the FIFA World Cup in Brazil 2014, the report from tourism marketing experts, Pangaea Network, says that the majority of travel professionals agreed that football tournaments are four times more popular than motor racing which ranked in second place. According to Samantha Gore, sales manager for Brazil estate agents uv10 based in Natal, it will be a wonderful opportunity for Brazil to show its other assets as well. In 2004, FIFA selected South Africa as the first African nation to host the World Cup finals. Brazil is showing the world that it is addressing some of its deep-seated social problems with the latest crackdown in Rio de Janeiro. Special forces conducted a widespread raid in Rocinha, one of the largest slums in the city which has been run by criminals for decades. The effort, which involved some 3,000 troops, is one part of a major effort by the authorities and government officials, to bring Rio de Janeiro into the 21st century ahead of the World Cup in 2014.
Speaking to CNN, one 18-year-old physical trainer who went by the name of Juliete, said: Before this was called a favela because it was full of criminals.
Now things have to be done to call it a neighbourhood. We need running water, proper sewage and things for young people to do. In the foreseeable future, as the South American country develops its infrastructure, shantytowns, or favelas as they are known in Brazil, will undergo urban development. Many developing countries require the upgrades discussed more companies need to look at assisting with infrastructure developments and not just concentrating on profit from sales. In what could be seen as a rerun of issues experienced by the London property market in recent years, the Brazil government is under extreme pressure to tackle the problem of secretive companies operating in the property market. This is an issue which was successfully tackled by the UK authorities when it was found that billions of pounds of London prime real estate were owned by offshore companies. The fight against potential money-laundering and other criminal activities obviously goes on but the UK government could be seen as something of a blueprint for their Brazilian counterparts. Of the 3452 properties highlighted it was found that they were controlled by just 236 companies, the majority of which are registered in either Panama, the British Virgin Islands, Switzerland, the USA or Uruguay. Historically these areas have been strongly connected to alleged money-laundering and other criminal activities although it is worth reiterating that it is not illegal to own real estate via an offshore company.
In many ways this call by Transparency International could not have come at a better time for bone fide real estate investors or a worse time for the Brazilian government. Again, the fact that an offshore company owns real estate does not necessarily mean there is anything untoward.
It is also worth mentioning that real estate assets have been a favourite of money launderers for some time now with properties bought and sold relatively quickly and the sale proceeds reintroduced into the system as bona fides funds. In many cases it is almost impossible to identify the underlying owners if assets are held offshore via shell getting loan with bad credit companies. However, it is possible for the Brazilian government to pass new regulations which would legally oblige parties acting for buyers and sellers to identify the underlying parties. What kind of impact would this have on the Brazilian real estate market in the short term?
Transparency is very important in all investment markets because not only does it allow the authorities to identify potential criminal activity but it also boosts investor sentiment. Investor sentiment should never be underestimated because it can literally move markets and lead to the switching of significant funds in and out of a particular market.
The Brazilian government has been under pressure for some time to make the political arena more transparent and now it seems that the real estate sector has joined that list.
Will the Brazilian government react to this call for great transparency? In reality they cannot afford to ignore it…… Over the last decade or so Brazil has been personal loans no credit checks one of the more prominent Latin American economies and while there has been a short-term hiccup with regards to demonstrations and government difficulties, the long-term future of Brazil is still very positive. However, over the last few weeks we have seen a significant drop in the Brazilian real against the US dollar and UK sterling which has alerted many international property investors to the region. The recent reduction in the exchange rate of the Brazilian currency was not only prompted by the mass demonstrations but also a slight weakening of the economy as forecast by HSBC. This was in line with an array of downgrades for the region even though Latin America as a whole is still far outperforming its North American, European and Far East and counterparts. It is difficult to say whether the reduction in the Brazilian currency will be a short-term issue or indeed it may drag on for a little longer. A number of prominent property websites are now quoting international investors as showing significant interest in the Brazilian property market as a means of taking advantage of the short-term political and economic situation. Despite the fact there is still significant poverty across Brazil, and indeed across many areas of Latin America, the middle-class population continues to grow and many of them have significant disposable income.
This is why many people believe that the Brazilian economy will not slow too much in the short to medium term and the long-term situation is even brighter bearing in mind the number of trading arrangements put in place by the BRICS partnership. Despite the fact that a number property experts believe that now could be a prime time to take advantage of a long-term investment in Brazilian property, you will still need to concentrate upon the more popular areas of the country.
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In some of China s largest cities we have prices pushing to levels which are quite frankly unsustainable. While in other areas of China there is excess housing inventory with the authorities buying up some properties and reselling them, at a loss, to the local community. So, you can see how difficult it can be to calculate a general consensus when part of the market is effectively dictated by capitalism and the other is dictated by socialism. Investor confidence is most certainly the elephant in the room because the more the Chinese government meddles in capitalist markets the less investors trust the politicians. While in some ways the Chinese real estate market is still going through a transitional period, from socialist to capitalist principles, the government is not helping the situation. The very fact that the authorities were recently buying up unwanted properties and selling them to the local community at a loss, to stimulate economic activity, does not go down well with investors. Selling properties at a discount to the market price will eventually drag down the market price. In the future it will be interesting to see whether the Chinese government is more sympathetic to the plight of both domestic and overseas investors in the Chinese real estate market.
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Reports are also starting to filter through of aggressive marketing techniques, unachievable promises and a lack of title documents which would seem to have set alarm bells ringing for some investors.
The idea that these properties would be developed guaranteed payday loans no matter what in tandem with the Brazil World Cup, with plots being located in the vicinity of Brazil s main stadiums, was a very clever and very cunning marketing technique. It seems that some investors were perhaps a little blinded by the forthcoming World Cup with a number of reports in the recent past suggesting there might be a property boom in Brazil.
It will be interesting to see if this particular company is able to repay at least part of the funds invested and whether indeed the individuals involved can be brought to court. The simple fact is that if an investment scheme, whether property or any other investment, looks too good to be true then it probably is too good to be true. While there will be times when special situations and high-risk investments can create above average returns, these are very few and far between and do require investors to take potentially excessive risks. The fact that this particular investment company specialised in direct installment loan lenders online Brazil may well muddy the water a little bit with regards to legal redress and court action.