Introduction
Fortaleza in northeast Brazil is a city famous for its small size, laid-back lifestyle and comfortable year-round sunny climate. Brazilians are flocking to the city for a better quality of life and the demand for superior housing from the country’s growing middle class is on the increase.
Although Fortaleza is one of the safest cities in Brazil our spacious 2-bed, 2-bath apartments are located within a large gated community packed with amenities and guarded by 24-hour security.
We have secured a massive off plan discount to market value of 37%, meaning that these great apartments are available from just €74,655. We have also negotiated a staged payment scheme allowing our investment property purchasers to spread their payments over the next two years, making this slice of paradise affordable to all.
Fortaleza - the new Istanbul
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Of course, there are many differences between Fortaleza and Istanbul, which is one of our favourite investment locations. However, many investors in recent years have enjoyed enormous success in the Turkish metropolis and we feel that the conditions that make for such an exciting market are in many ways replicated in Fortaleza. Like its Turkish counterpart, Fortaleza is experiencing substantial migration from surrounding rural areas and is growing at an astonishing rate. There is a big housing shortfall but demand is growing ever stronger. As with Turkey, Brazil has an emerging middle class who crave high-quality housing and are turning in droves to a maturing (or in the case of Turkey, new) mortgage market with low interest rates. Home ownership is within reach of people who previously couldn’t afford it.
Population growth
Fortaleza, the state capital of Ceará, has grown by 25% in just five years. The population now stands at 2.4 million, but according to an official survey, the real growth rate could be higher than this figure. “The State of Ceará was responsible for a 4.39% growth in the [whole] Brazilian population [in 2004]. The statistics reveal important phenomena, namely the urbanisation rate behaviour pattern. Showing a high growth tendency, the urbanisation rate that in 1940 was roughly 23%, [had] reached 71.5% in 2000 and a whopping 76.5% by 2004.”1
Growing middle class
In addition, Brazil’s significant economic growth is having a positive social effect. Recent reports suggest that Brazil’s middle class is growing as the economy develops. Those who were once on lower incomes are now creating a larger middle class2. This is very promising for the property market, as growing wages leads to greater mortgage-achieving potential and to increasing demand for property.
This demand stems from the middle classes in Brazil that are set to increase in number by 2015, according to research by the Samsung Economic Research Institute on the BBC Brazil website3.
According to the survey, the number of middle class families in Brazil is set to grow from 16.8 million in 2005 to some 27.7 million in 2015, an increase of 64.5%.
Housing demand
Demand for good housing is indeed high – a recent special report on Brazil in the Economist (14/04/07) reported that the country has a shortage of 8 million units. It explains this situation by saying that: “Property finance [has been] throttled by inflation, low incomes and a legal system that failed to protect lenders.”
However, this is all changing, as the report goes on to state: “Property lending doubled in 2006, partly because of lower interest rates and partly because arcane rule changes made it safer.” (4)
Booming mortgage market
Like Turkey, Brazil’s mortgage market is still in its early stages of development. According to the Daily Telegraph (13/01/07), only 22% of home and business owners have financed their property with a mortgage, compared to 70% in Europe and the US.
The country has also seen interest rates drop from 25.7% in 2003 down to 12.7% in April 20075. Although this is high by UK standards, it shows that the government is managing the economy effectively. This is having a very positive effect on the mortgage market, as borrowing becomes within reach of many more people than ever before.
As banks diversify and develop their mortgage products, the market will grow, and the knock-on effect will be increasing demand for quality property.
- ipece.ce.gov.br/publicacoes
- marketwatch.com
- bbc.co.uk/portuguese/reporterbbc/story
- economist.com
- bcb.gov.br/?INTEREST
Why Brazillians want to live in Fortaleza
Fortaleza is a popular destination for people relocating from the larger Brazilian cities. Just as Londoners dream of escaping the rat race, or New Yorkers seek a more relaxed pace of life, so Sao Paulo’s Paulistas and Rio de Janeiro’s Cariocas often yearn to escape the crazy and sometimes dangerous big cities. Fortaleza is the ideal destination for several reasons:
Its climate is better – it stays at a steady 28-30ºC all year round, and has only a short rainy season. The sea breeze keeps the temperature comfortable and it is not humid. The cities further south have wider ranges of temperatures and a recognisable winter season of bad weather.
It is smaller and less crowded – just 2.4 million, compared with 11.6 million in Sao Paulo and 5.6 million in Rio de Janeiro. The city is more compact and doesn’t have such a problem with traffic and pollution as the bigger cities.
It has a far less intense pace of life – some people thrive on the frantic pace of a big city, while others tire of this and want to slow down. Fortaleza is still a sizeable city, and could hardly be described as sleepy, but it is noticeably more laid-back
in comparison.
Incidences of crime and petty theft are significantly lower – the larger cities suffer from well-documented problems with street crime. Of course no city in the world is entirely crime-free but Fortaleza feels a whole lot safer and the sort of place in which you would be happy to raise a family.
Property prices are significantly lower than the bigger cities, sometimes three to four times cheaper, both to buy and to rent.
It is close to some truly beautiful coastline – while Sao Paulo is a good two hours’ drive from the nearest decent beach.
Fortaleza is the closest point in Brazil to Europe – flights from there to Lisbon are less than seven hours duration, which appeals to Brazilians with family in Portugal, or business connections there.
Case study
Lucimar Saccoman is a marketing director in a property company in Fortaleza. A born and bred Paulista, she moved to Fortaleza threeyears ago and has bought a villa in Quintas das Fontes. We asked her about her decision to leave Sao Paulo, and why she chose Fortaleza for her new home.
Q: Why did you want to leave Sao Paulo?
To be honest, the main reasons were the violence and lack of life quality and though it’s my home city and I have lots of family there, I grew tired of the traffic, the noise, the pollution and the craziness! I decided that I didn’t want to live my life at that pace any more.
Q: Why did you choose to move to Fortaleza? What attracted you to the city?
We were looking for better life quality. Fortaleza for us was always a place that we would like to live: the weather, the traffic, the city size, the number of people and mainly the possibilities to work.
Q: Did you find it hard to find work? Are there good employment opportunities?
I moved to Fortaleza in September 2004, and my husband had moved six months before to find a place for us to live.
I stayed in Sao Paulo to sell our house and car and to wrap things up there.
So my husband found a job and I quit mine in Sao Paulo and started a new beginning. I arrived here in September, and by December I had found a job, so for me Fortaleza was an easy place to get work. I worked in the fashion textile industry and now am in property.
I like that you can work hard during the week, but in five minutes you can go the beach and have fun even after work or just on the weekends. For work, you can arrange many meetings during the day in different places and it’s possible to do this because of the short distances and lack of traffic, while in Sao Paulo you can only have one appointment for the morning and maybe another in the afternoon, you have no time to move around the city – the traffic is so bad. All these things together make your life easier and more enjoyable.
Q: Why do you like it?
As I said, life here is very good, the weather for us is perfect since we like summer and sun. I have made great friends, I met interesting people here, and we can have fun and work in a balanced way. The cost of living is lower here, the traffic in comparison to the big cities is calm and everything is within easy reach. Fortaleza has all the facilities of a big city but in a small one – restaurants, shopping, all kind of services, movies, music and so on. Also, there’s space to walk our dogs – a very strong reason for our happiness!