Brazil Reis exchange rate gains!

[Golfingworld]

Please can all those agents out there give advice to prospective "investors" as to how the increase in Brazil $Reis will stimulate the Brazilian property market? Today's rate against the UK Pound is 3.28 against 3.85 a year ago not got my calulator to hand but that looks like a 20% increase in prices for Europeans to me..not sure how the Euro is trading but as Reis are Dollar related probably the same pattern. As properties are therefore 20% more expensive in Sterling terms, please can Agents explain how a) this will affect off plan staged prices and b) how a 20% increase in costs will stimulate demand from overseas?

[michaelbush]

Originally Posted by Golfingworld

Please can all those agents out there give advice to prospective "investors" as to how the increase in Brazil $Reis will stimulate the Brazilian property market? Today's rate against the UK Pound is 3.28 against 3.85 a year ago not got my calulator to hand but that looks like a 20% increase in prices for Europeans to me..not sure how the Euro is trading but as Reis are Dollar related probably the same pattern. As properties are therefore 20% more expensive in Sterling terms, please can Agents explain how a) this will affect off plan staged prices and b) how a 20% increase in costs will stimulate demand from overseas?

Agreed the strength of the Brasilian real is not good news for us- however I am sure the Brasilian government is not too worried, otherwise they would be dropping interest rates rather more rapidly than they are. I have checked the official exchange rate on XE.com - The World's Favorite Currency and Foreign Exchange Site (live quotes) and the market rate is as below
BRL Brazil Reais 3.5525671488 0.2814865865
Just goes to show what the tourist exchange houses are making!! Another good reason to make sure you transfer money in the correct way, through the central bank of Brasil, and not in a suitcase!!!

[robh]

Originally Posted by michaelbush

Agreed the strength of the Brasilian real is not good news for us- however I am sure the Brasilian government is not too worried, otherwise they would be dropping interest rates rather more rapidly than they are. I have checked the official exchange rate on XE.com (live quotes) and the market rate is as below
BRL Brazil Reais 3.5525671488 0.2814865865
Just goes to show what the tourist exchange houses are making!! Another good reason to make sure you transfer money in the correct way, through the central bank of Brasil, and not in a suitcase!!!

For us this the currency appreciation hasn't adversely affected demand at all. If anything the opposite is true.

The rise seems to be caused by the increased inflow of foreign investment capital, which if it continues or increases (both very likely) will force the governments hand in having to reduce the interest rate. If they don't then Brazil will pretty quickly find itself priced out of the market for it's exports especially when the USD starts going up again.

All those recent oil discoveries will probably cause the next major currency rise when they come on line around 2010 and Brazil becomes a net exporter of fuel products.