The North-eastern coastal area of Brazil is enjoying increased investment focus as inflation has decreased to manageable levels and Brazil is now politically more stable than ever before. The Northeast is the poorest region of Brazil, but is attracting new investment as the Government encourages the growth of tourism in this location. International flights arriving in Brazil have increased by 13% per annum over the last 3 years. Tourism is one of the fastest growing industries in Brazil with a growth of over 20% last year. However the vast majority of tourism is still home grown and Brazilians make up over 90% of the tourist market. This proportion is changing substantially as more and more international tourists are considering Brazil as their holiday destination. At present Brazil is generally better known among Portuguese, Spanish, Italian and other South American tourists but there are an ever increasing number of UK, Scandinavian and North American tourists now visiting the country.
Brazil`s rapid growth in tourism is creating a huge demand for property and shrewd property investors are acting early, purchasing good value properties with a view to generating good rental yields. The market is gaining momentum from the purchasing power of the international market and property prices are steadily pushing upwards. The Brazilian lending base rate has fallen from a high of 42% in 1996 to 12% in 2007. Brazil`s economic expansion and low inflation levels could well result in central bankers in Brazil dramatically cutting their lending rates. A reduced cost of borrowing for Brazilian citizens, making loans affordable will be another lever to accelerate property price growth.
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