World Property Values Dropping..why will Brazil increase?

[Golfingworld]

Here's a conundrum for you, interested to hear the views. Clearly the US sub prime debacle has triggered a stagnation or drop in world property markets. Perhaps this is more due to the credit squeeze associated with this problem, but either way there now seems to be a correction here or coming. It seems that many of these property markets have been falsely stimulated by cheap loans but now the confidence element is eroding..where are all the new buyers and consequent price increases going to come from? In terms of Brazil there are no loans (not for foreigners anyway) so that may be an advantage but in effect many buying off plan see their staged payments as a form of borrowing. More importantly, why is Brazil going to buck the world trend?

[RalphJ]

Originally Posted by Golfingworld

Here's a conundrum for you, interested to hear the views. Clearly the US sub prime debacle has triggered a stagnation or drop in world property markets. Perhaps this is more due to the credit squeeze associated with this problem, but either way there now seems to be a correction here or coming. It seems that many of these property markets have been falsely stimulated by cheap loans but now the confidence element is eroding..where are all the new buyers and consequent price increases going to come from? In terms of Brazil there are no loans (not for foreigners anyway) so that may be an advantage but in effect many buying off plan see their staged payments as a form of borrowing. More importantly, why is Brazil going to buck the world trend?

property values have increased here for a foreign investor over the last two years simply because of the valuation of the currency. As far as brazil increasing while the world decreases....would be difficult for me to justify that one.

The key to investing here, like anywhere, is to get in early and know what's going on in the area. We purchased a large, beachfront property 4 years ago when we first got word of brazil's largest tourism company, CVC, was negotiating to buy a huge tract of land to build a resort a few kilometers from where we had an opportunity to buy. We negotiated a price that was actually 60% of the current market value at that time, and since we bought CVC has gotten their building permissions within the last 90 days and numerous other condominiums have sprung up in the area. Our land since our purchase has appreciated 260%, but with the strengthening of the real it is much more than that! We bought when the pound was 5.3:1...it's now 3.6.

[JMBroad]

Originally Posted by Golfingworld

Here's a conundrum for you, interested to hear the views. Clearly the US sub prime debacle has triggered a stagnation or drop in world property markets. Perhaps this is more due to the credit squeeze associated with this problem, but either way there now seems to be a correction here or coming. It seems that many of these property markets have been falsely stimulated by cheap loans but now the confidence element is eroding..where are all the new buyers and consequent price increases going to come from? In terms of Brazil there are no loans (not for foreigners anyway) so that may be an advantage but in effect many buying off plan see their staged payments as a form of borrowing. More importantly, why is Brazil going to buck the world trend?

Interesting. Any credible sources which helped you arrive at this conclusion or just wishful speculation on your behalf? (don't mean to start a debate but I like promoting the "think for yourself, don't just take the garbage and nonsense people try to spoon feed you".)

[Golfingworld]

I am speaking about the actual price people get when they sell and not the perceived asking price. There seems no doubt the the US market is dropping, certainly the UK market is stagnant....the "Costas" nobody can sell anything I just don't beleive anyone who tells me otherwise....Europe in general, guessing....its a discussion point overall and in relation to Brazil and I just want to hear how the assumptions that (real) prices will increase. I bought recently and straight away got 20% off the asking price and there are now only 3 of 10 units left. A paradox, units selling fast but prices dropping...how does supply and demand explain that and how therefore can value appreciation be justified?

[RalphJ]

Originally Posted by Golfingworld

I am speaking about the actual price people get when they sell and not the perceived asking price. There seems no doubt the the US market is dropping, certainly the UK market is stagnant....the "Costas" nobody can sell anything I just don't beleive anyone who tells me otherwise....Europe in general, guessing....its a discussion point overall and in relation to Brazil and I just want to hear how the assumptions that (real) prices will increase. I bought recently and straight away got 20% off the asking price and there are now only 3 of 10 units left. A paradox, units selling fast but prices dropping...how does supply and demand explain that and how therefore can value appreciation be justified?

GW, in my experience here in Brazil, unfortunately for we gringo's, the property we're sold is normally sold for a price well above current market value for that area. Another reason why people need to do their own due diligence and find local people they can trust....it's not easy.

The project I am developing at the moment, 3 beachfront condominiums, are being sold for exactly what their current market values are here in Brazil. Another condominium right down the street which is being built by the ex-governors son, and have sold 95% of their units in the first 4 months of sales, have identical sized lots, building space, etc, and were sold at the very figures we're asking for today. And 97% of the units to this point have been sold to brazilians.

Out of curiousity...where did you buy? Don't tell me Fortaleza/Natal. The onrush of gringo's have pushed prices there through the roof ridiculously.

[Golfingworld]

I did indeed buy in Natal, right in Ponta Negra. I think my place is reasonable considering the position close to all "amenities" and anyway it is what I want and is not for profit so my motivation is different. However, it is not an offplan development (it is 90% complete) it is a small block and I am not tied to a management company or anything. It was a private purchase and sale really...but I did my own research and went there numerous times etc. I didn't buy mine through a computer screen or at a cocktail party! I also bought here as whatever happens there will always be tourism and growth in this location...but overall i was incharge of my own destiny. I didn't use an Agent bought direct from the builder.

[JMBroad]

Originally Posted by Golfingworld

I am speaking about the actual price people get when they sell and not the perceived asking price. There seems no doubt the the US market is dropping, certainly the UK market is stagnant....the "Costas" nobody can sell anything I just don't beleive anyone who tells me otherwise....Europe in general, guessing....its a discussion point overall and in relation to Brazil and I just want to hear how the assumptions that (real) prices will increase. I bought recently and straight away got 20% off the asking price and there are now only 3 of 10 units left. A paradox, units selling fast but prices dropping...how does supply and demand explain that and how therefore can value appreciation be justified?

Out of curiousity, what was the €/m2 after you got the 20% discount?

[beenthere]

Originally Posted by Golfingworld

I am speaking about the actual price people get when they sell and not the perceived asking price. There seems no doubt the the US market is dropping, certainly the UK market is stagnant....the "Costas" nobody can sell anything I just don't beleive anyone who tells me otherwise....Europe in general, guessing....its a discussion point overall and in relation to Brazil and I just want to hear how the assumptions that (real) prices will increase. I bought recently and straight away got 20% off the asking price and there are now only 3 of 10 units left. A paradox, units selling fast but prices dropping...how does supply and demand explain that and how therefore can value appreciation be justified?

Wow this just gets better and better.

I think there was a long discussion on here about discounts, where I think even you were saying that developers that offer discounts should be avoided like the plague.

Anyway if you could get 20% why not 30 or 40% as it sounds like the markup was huge .....

[beenthere]

Originally Posted by Golfingworld

I am speaking about the actual price people get when they sell and not the perceived asking price. There seems no doubt the the US market is dropping, certainly the UK market is stagnant....the "Costas" nobody can sell anything I just don't beleive anyone who tells me otherwise....Europe in general, guessing....its a discussion point overall and in relation to Brazil and I just want to hear how the assumptions that (real) prices will increase. I bought recently and straight away got 20% off the asking price and there are now only 3 of 10 units left. A paradox, units selling fast but prices dropping...how does supply and demand explain that and how therefore can value appreciation be justified?

1.1% growth for October sounds stagnant to me too

[JMBroad]

Originally Posted by beenthere

1.1% growth for October sounds stagnant to me too

Wooosh right over my head. What are you talking about 1.1% growth? Did I miss some figures somewhere lol